The "lone brave" who defies the war strategically invests in credit bonds against the trend, achieving impressive returns.

Buying bonds amid missile strikes between Iran and the United States has always been a high-risk decision. It requires investors to believe that, against a backdrop in which rising government borrowing costs are pushing overall yields higher, these yield increases are enough to hedge against long-term energy shocks and inflation threats. Now, this strategy of locking in higher yields is beginning to pay off for portfolio managers on both sides of the Atlantic. Euro-denominated investment-grade bond indexes are heading for their best monthly performance in more than a year, while eurozone junk bonds have posted their largest gains since 2023. The U.S. market has shown a similar turnaround from negative to positive performance.