As a result of the turnaround in interest rates, corporate bonds have become attractive again for investors.
Frankfurt Just a year ago there wasn’t much to be gained from bonds, but that has changed with the rapid turnaround in interest rates by the central banks. In Europe, corporate bonds in particular are once again earning considerable interest. The average yield on interest-bearing bonds denominated in euros with a good credit rating has risen from 0.4 to four percent over the past year and a half.
That’s also attractive when you look at what the companies are offering shareholders in dividends. At 3.6 percent, the dividend yield – i.e. the distribution to shareholders in comparison to the share price – is now well below the yield on corporate bonds in the broad European stock index Stoxx Europe 600.
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