Bloomberg Surveillance · Monday, July 6, 2026
The tech sector's presence in the investment grade market has significantly increased, now representing 14-15% of the market, up from 10%. This growth is led by issuances from hyperscale companies, which have strong balance sheets. Opportunities exist in extended investment grade sectors offering higher yields, often linked to the AI buildout.
“A few years ago, if you would have asked me about the tech sector as a bond investor, I would have said, well, it's interesting, but it's really a small part of our market. You know, it's not really something that is going to drive spreads or the narrative. And obviously that has changed a lot, and the tech sector of the investment grade market has moved from you know, ten percent moving to fourteen fifteen percent, and that's being led by the issuance of the hyper scalers, which from a balance sheet perspective are are very high quality relative to the average of the investment grade universe.”
“I would say, we're we're finding the most opportunity is looking beyond the average index level for investment grade at five percent and looking where what I would call kind of the extended sectors of investment grade where you can actually pick up an additional one hundred basis points of yield.”
“These are things that are backed by investment grade issuers oftentimes investment grade rated, but for a number of different structural reasons, trade with a significant yield, pickup and trade more like high quality, high yield.”