- Rethinking fixed income investing when the easy money is coming to an end
Rethinking fixed income investing when the easy money is coming to an end
Friday 11 May 2018
Research / Market
Core fixed income allocation, usually comprising high-quality government and corporate bonds, has played a relevant role in diversified portfolios over the last few decades. In a 30-year bull market for bonds, this allocation has been a stable source of performance; it has, for a long time, provided interesting income and helped to limit the overall portfolio drawdowns. Investors now stand at a crossroads: changes in central banks’ monetary stances are resulting in the end of the easy money era driven by excess market liquidity. This change will provide, in our view, a fertile ground for active bond investors able to dynamically exploit opportunities in multiple fixed income sectors while it could challenge more traditional and static fixed income allocation approaches.
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