High-yield corporate bonds are set to make good returns and are a more attractive way of buying into the credit space than bank shares which remain very volatile, Charlie Morris, manager of global trend fund at HSBC Investments told CNBC Wednesday.
An upswing in corporate bond returns relies on inflation easing and interest rates coming down, and Morris is confident that this will happen.
"I think rates are going to ease and that's going to help the high-yield bond sector," Morris said on "Worldwide Exchange." (See the accompanying video for more from Morris.)
"These bonds tend to be in the real economy rather than the financial sector (and) the spreads are at levels that are compatible with the bottom of a bear market in junk bonds," he added.
It's also a good time to buy into the assets in terms of the pricing and in terms of easing cost pressures, Morris said.
Statements from the Bank of England gave investors further hopes of easing monetary policy Wednesday, as the central bank said inflation would peak by the end of 2008, leaving scope for a rate reduction.
For oil prices, the high point of $147 a barrel won't be surpassed for years to come, said Morris, who has been reducing exposure to oil producers over recent weeks to 'underweight.'