Despite tight credit spread valuations, all-in yields on investment-grade (IG) bonds remain elevated and present a compelling opportunity for investors. With yields above 5%, high-quality IG bonds provide income that significantly outpaces most inflation measures. 

For instance, the 5-year, 5-year Forward Inflation Expectation Rate, a widely accepted gauge for long-term inflation expectations, currently sits at 2.3%. This implies that investors can expect to earn almost 3% of real returns from IG bonds both in the near term as central banks cut rates over the coming quarters and longer-term over the next decade. The combination of attractive yields, real returns, and the potential for capital gains make IG bonds a great choice for investors looking to optimize their portfolios in the current market environment.