InvestmentsOct 31 2014

Axa’s Iggo forecasts new method of bond dealing

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The ability of fund managers to deal bonds between each other is “close at hand”, according to Axa Investment Managers’ head of European fixed income.

Chris Iggo said much had been made of liquidity in bond markets, although a lot of the commentary had been “mostly from a scaremongering point of view”.

He added: “Shouting and screaming about it won’t make liquidity come back, so it’s time to think about this differently and address the challenges that structurally reduced liquidity brings.”

Mr Iggo said liquidity could be improved in various ways, such as investing for the long term and allowing bond managers to invest in more than one sub-asset class.

But he said another way could soon be available.

“Away from portfolio management, asset management companies are also actively engaged in creating new market structures that allow liquidity to be preserved outside of the traditional over-the-counter model with banks as market makers,” he said.

“The ability of asset managers to deal directly with each other is close to hand and the technology is certainly in place to allow this to become the norm going forward.”