“We think it’s a good environment to be in corporate credit — we have an outlook of 5 to 6 per cent returns in 2020, underpinned by central banks being more likely on hold or potentially cutting rates,” Mr Bommi said.

“We also see growth stabilising, using the US as an example, and corporate health is still good from a credit perspective. You don’t need robust growth to justify valuations as long as companies are maintaining or improving their credit profiles.”

He added that the risk of a recession in the US had receded, but that the Federal Reserve was likely to maintain a bias towards cutting rates during the year.

“In 2020, we will see economic growth more stabilised in that mid-1 per cent level in terms of GDP growth. We don’t see a recession looming in the next 12 to 24 months; while economic growth will be lower, it will still be good,” Mr Bommi said.

“There’s also potential for one more rate cut out of the Fed, and after that, they are more likely to be on hold, unless we see growth or inflation start to pick up.”

Mr Bommi said downside risk would continue to loom in the corporate bond market in 2020, underlining the importance of selecting a fund manager with a focus on downside protection.

“The thing with credit is the risks in some ways are asymmetric, because at some points in the market your upside is a couple of points close to coupon [rates], but there is a lot of downside if things go wrong, so you want a manager with that focus,” he said.