Germany is hitting negative sovereign yields, while Spanish regions and banks seek financial assistance from their parent country, which needs a bailout of its own.
Fundamentals remain strong across the board, but high-quality corporate credits are likely to outperform in a volatile environment, says Morningstar's Dave Sekera.
Income investors concerned about heavy government-bond concentration in the Barclays Aggregate Bond Index should consider dividend payers and the bonds of countries with low debt/GDP ratios, says the Princeton professor.
Morningstar's Dave Sekera describes the market breakdown after Lehman, the state of the bond market now, and investors' heightened attention to systemic risk today.
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