A previously gloomy corner of the debt world has become the biggest winning trade in global financial markets, producing returns that few traders have seen in more than a decade.
Hybrids, the riskiest slice of a real estate company’s debt, have returned more than 75 per cent this year. For the top 10 performers for the securities also known as subordinated bonds, returns amount to about 170 per cent in the period, beating Nvidia’s stock, the darling of the AI craze, by 20 percentage points.
