JPMorgan Manager Sees 6.5% Yields in High-Quality Corporate Debt

JPMorgan Asset Management portfolio manager Priya Misra said highly rated corporate debt was offering yields of about 6.5%, allowing investors to seek income without moving significantly lower in credit quality.

“You can actually take credit risk in the highest quality companies and still get 6.5% yield,” Misra said. “So, you actually don’t have to go down in credit quality.”

Misra co-manages the JPMorgan Core Plus Bond Fund ETF (JCPB), which had nearly $16 billion in assets as of Aug. 31. Just over three-quarters of the fund’s holdings were rated BBB or higher.

The fund has increased some double-B and single-B exposure as high-yield spreads widened. Misra said the firm had begun adding duration in recent days as it considered whether the rate move was nearing its end.

JCPB was down more than 5% this year as of the Oct. 9 close.

Misra said the strategy could appeal to investors concerned about concentrated exposure to artificial intelligence stocks. Fixed income offers a broader mix of returns through Treasurys and credit outside the technology sector, she said.

“There’s a huge AI exposure,” Misra said. “What fixed income gives you is this diversified set of returns. It’s not just an AI trade or a tech trade. You have the Treasury trade. You have credit outside of AI.”

She also said investors should evaluate bonds and sectors individually while considering economic conditions and company balance sheets. Misra raised concerns about the impact of higher interest rates on the housing market.

Joanna Gallegos, co-founder of BondBloxx, described yields across debt markets as historically attractive.

BondBloxx operates fixed-income exchange-traded funds covering Treasury, corporate, private credit and emerging-market debt.

“Base rates are high, and they’re stable,” Gallegos said. “The fundamentals of these corporations are so strong, and the economy continues to grow.”

BondBloxx Private Credit CLO ETF (PCMM) was down 0.6% this year as of the Oct. 9 close.