There are two things investors need to beware when looking for yield: a crowded market and volatility.
This is the warning from Nicholas Wall, manager of the Old Mutual Global Strategic Bond Fund, who comments: “Many hunt-for-yield trades are overcrowded and mature.
“Investors should make sure they can tolerate liquidation periods, and that they do not find themselves in a position where they are forced sellers.”
Yet despite this prognosis, many investors are looking for yield in the fixed income markets, and the fact the market is more than US$100trn in size means there are many opportunities out there to create stable, diversified fixed income portfolios that can outstrip inflation.
This special report will discuss where people are finding yield in the fixed income markets, what sort of tailwinds or headwinds are affecting bond performance in the near-term, how to use different strategies such as short-duration in a portfolio, and ways to mitigate inflation’s ravaging effect on a portfolio.
Contributors to this report: Nicholas Wall, manager of the Old Mutual Global Strategic Bond Fund; Patrick Connolly, head of communications for Chase de Vere; Darius McDermott, managing director of Chelsea Financial Services; Jonathan Baltora, portfolio manager for AXA Investment Managers, and Chris Iggo, chief investment officer for AXA Investment Managers; Dan Ivascyn and Alfred Murata, managers of the Pimco Income Fund; Chris Leyland, deputy chief investment officer for True Potential; Eugene Philalithis, portfolio manager of the Fidelity Multi-Asset Income Fund; Stephen Crewe, director of Fulcrum Asset Management; Bernard Delbecque, senior director for economics and research at EFAMA; Morningstar; Standard & Poor’s; Moody’s; The Investment Association.