It might not be the safest route, but corporate defined benefit plans may do well investing in medium-rated corporate bonds, according to Standish Mellon Asset Management.
Defined benefit plans typically focus their corporate bond investments on A and higher-rated securities in an effort to insulate their plans from market volatility.
But certain "BBB"-rated paper, which is the lowest rating before a company's debt falls to "junk bond" status, can lead to improved diversification and better returns, according to Standish Mellon, the Boston-based fixed-income specialist for BNY Mellon
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
