Meanwhile, TM Darwin founder David Jane sold his position in emerging market bonds in May, “as the ending of quantitative easing looks set to reduce the amount of money flowing into an overvalued asset class.
“Even following the falls we don’t see sufficient value to get involved yet”.
He also suggests most areas of corporate bonds seem unattractive, given exposure to rising yields and historically narrow spreads over government debt.
He adds: “We still see attraction in peripheral eurozone government bonds where spreads remain high over German yields, but the risk of default is reducing as economic recovery takes hold.”
Joanne Ellul is a freelance journalist