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By Klaus Blaabjerg, head of Sparinvest Value Bonds Team
Government bonds and other ‘risk-free’ investments are paying such low rates of interest these days that it is no surprise that investors have turned their attention to the corporate bond markets where interest rates are much higher. Companies issuing bonds have generally paid a higher interest rate to investors than Governments have. Historically, this has been accepted as a logical and necessary compensation to investors for the higher risks involved with lending their money to companies rather than Governments.
But now things have changed and the logic looks a bit shakier. In the past five years, Governments in the developed world have run up unprecedented debts and are now printing huge...
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