Bank of America says the ongoing search for income is reshaping credit markets, lifting demand for high-quality bonds and changing the tools investors use to manage risk. In a note, strategist Ioannis Angelakis wrote that elevated yields and a more stable rates backdrop are making high-quality credit increasingly attractive, encouraging a focus on total returns. BofA highlighted fixed maturity funds as key structural buyers, with assets under management around $130 billion, though their growth has slowed from 2024-25. The bank also noted that ETFs and portfolio trading are transforming market access, while CDS indices have become the liquidity hedge of choice for rapid repositioning.
Bank of America CorpBofA's note highlights growing demand for high-quality credit and fixed maturity funds, benefiting its trading and asset management businesses.
JPMorgan Chase & Co