"Fearless warrior" who goes against the trend to layout credit bonds wins profits.

As the market rebounds on expectations of a prolonged ceasefire, credit investors who bet on high-yield corporate bonds during the Iran war are proving their decisions to be increasingly correct. Buying bonds during the missile attacks between Iran and the United States has always been a high-risk decision. This requires investors to believe that the increase in government borrowing costs driving overall yield higher is sufficient to hedge against long-term energy shocks and inflation threats. Now, these trades that lock in higher returns are beginning to pay off for portfolio managers on both sides of the Atlantic. Euro-denominated investment-grade bond indices are heading towards their best monthly performance in over a year, while junk bonds in the Eurozone are also seeing their biggest gain since 2023. The US market is also seeing a similar trend from negative to positive.