Fixed income

Given the twin pressures of inflation and volatility, we believe the inherent strengths of short term bonds can give investors some comfort through this uncertain phase of the cycle.

We think a base case that central banks will follow a more measured monetary policy path than markets are currently pricing in is reasonable given the current backdrop.

Global bond markets have moved sharply in the wake of Russia’s invasion of Ukraine as investors have tried to assess the impact of an unprecedented raft of financial and economic sanctions.

Default rate estimations depend on how you define defaults and what index you use, but there is no doubt we are at record lows in European high yield at the moment.

With inflation soaring and the economic recovery looking more fragile, we look at three famous central bank policy errors to demonstrate why they can be so dangerous for investors, and consider how a fixed income portfolio can be strengthened against the risk.

For our Q1 fixed income event, Mark Holman, portfolio manager at Vontobel boutique TwentyFour Asset Management, provided an update on the firm’s flagship, global unconstrained strategy, the Vontobel Fund – TwentyFour Strategic Income Fund.