When bonds leave the building

Rob Price looks at how the downgrade of Électricité de France affects schemes

clock • 4 min read
 The Électricité de France coal-fired power station in Le Havre, France, which closed in 2021.
Image:

The Électricité de France coal-fired power station in Le Havre, France, which closed in 2021.

An index of bonds issued by large companies is a useful metric against which to measure fund performance.

But credit indices are not perfectly constructed. They rely on periodic rebalancing rules which leave them open to concentration risk - across issuers, sectors and countries. For long-term inves...

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