Corporate bond liquidity a worry

The latest quarterly note from Sebastian Lyon, manager of the Trojan fund, has some sensibly cautionary words about the liquidity risk that many investors face by piling into corporate bonds, as they have been doing for months now. Desperately seeking yield has not only driven the income returns from corporate bonds to very low levels, but poses the obvious question: how quickly and at what price will investors be able to unwind their holdings as interest rates eventually rise?

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