Colbert Reduces Corporate Bond Holdings Amid High Prices

Scott Colbert, Director of Fixed Income at Commerce Bank in Clayton, Missouri, has reduced his corporate credit bond holdings to their lowest level since 2012. This decision comes as a warning that corporate debt is currently priced too high with little margin for error, making potential returns insufficient to compensate for the risks taken.

Colbert manages $28 billion in assets and expects economic growth to accelerate in the coming months. However, he notes that opportunities in the market are limited, and the reward for the risks he's taking is the lowest he's ever seen in his career.

The yield on bonds issued by U.S. blue-chip companies such as AT&T, JPMorgan Chase, and Amazon is only 0.8 percentage points higher than that of U.S. Treasuries, a premium close to the nearly 30-year low reached earlier this year.