Key takeaways
- Investment-grade credit at 5.5–6.5% all-in yield is genuinely attractive risk-adjusted, but only with active selection.
- BBB-tier issuers facing 2026–2027 maturity walls deserve cautious underwriting; A-tier balance sheets are a different conversation.
- Duration positioning is the contrarian trade — consensus is short, structural demand for quality duration is rising.
Fixed income in 2026 finally has yields worth the conversation. Whether those yields compensate for the underlying credit risk depends entirely on issuer-by-issuer underwriting.
Yields look attractive — but {#section-1}
Headline IG indices yield 5.8% — the highest level since 2008. The risk is in the spread between top-quality and tier-2 issuers, which is widening.
Where the dispersion is {#section-2}
BBB-rated issuers facing 2026–2027 maturity walls are the most differentiated. Some refinanced on time at attractive levels; others didn’t and now face issuance into a less forgiving market.
Duration: the contrarian view {#section-3}
Sell-side consensus is short duration. Real-money flows tell a different story — pension funds and insurers are extending duration aggressively to lock in current yields. We side with the flows, not the strategists.