Reflation trades lost a little steam as worries for global growth persist in the face of rising infection rates from new virus variants. However these worries have not stopped US indices reaching new heights and credit spreads tightened on the month. The primary market remained active across all currencies in Investment Grade. High Yield also saw continued new issuance, most of which has little compensation for the investor.

There was a rare 5-year floating rate note issued in Sterling by The Canada Pension Plan Investment Board which enabled us to take profits on their longer dated fixed 29’s, swapping fixed for floating almost at level yields. There was activity in T2 bank capital issuance and we took new issues from Close Brothers (a strong credit to the fund), Credit Agricole and Lloyds. These all have 5-year non-call 10Y structures and have performed well in the secondary market. We also tendered our Investec 4Q 22/28’s and Close Brothers 4Q 22/27’s, both of which were soft allocations into new issues. Aviva called an old friend in the form of their 6.625’s at their first call date.