Fixed Income

UK government bond yields have pushed higher this month as markets have digested a building political crisis, with the prime minister, Sir Keir Starmer, now set to face a Labour Party leadership contest following dire local election results on May 7.

Markets have held up surprisingly well, even as pressures build beneath the surface. Since the war in the Middle East began in February, investors have had to contend with rising energy prices, renewed inflation concerns, and a quasi-U-turn in monetary policy expectations.

With the Middle East conflict clouding the outlook for inflation and interest rates, TwentyFour Asset Management’s Doug Charleston explains why asset-backed securities (ABS) could be a valuable diversifier for fixed income investors looking to deal with further volatility.

Since their introduction in 2013, AT1 bonds have acted as a valuable kicker for many fixed income funds, having consistently delivered excess return over more mainstream credit markets such as high yield bonds over the medium term.

With tensions in the Strait of Hormuz increasing over the weekend and markets getting used to oil prices well in excess of $100 per barrel, this seems an opportune moment to zoom out and look at the state of play in fixed income markets, considering the unsettling reality of a longer-than-expected conflict in the Middle East.

Emerging markets have just weathered two major global shocks — and have come out on top. We believe this is no accident. Many investors missed the post-Liberation Day rebound by staying anchored in a framework that may no longer describe the emerging-market universe. The same misreading risks compounding potential portfolio under-exposure today.

Sharp swings in government and corporate bond markets since the onset of the Middle East conflict pose interesting questions for fixed income investors.

TwentyFour Asset Management’s Jack Daley reflects on a strong start to 2026 for investment grade credit, before geopolitical escalation in the Middle East drove increased volatility later in the quarter and shaped market conditions.

TwentyFour Asset Management’s Felicity Juckes discusses how geopolitics, inflation and shifting risk sentiment shaped fixed income markets in the first quarter of 2026, and why the focus has remained on high‑quality credit.

TwentyFour Asset Management's Aza Teeuwen reflects on a volatile start to 2026, and explains why European ABS continues to provide relative stability over the quarter, particularly in investment grade.

Negative headlines around private credit have intensified this year, driven by the AI-related software sell-off and the news that most players have restricted withdrawals from retail private credit funds.

We believe EM fixed income is better positioned today than four years ago, despite uncertainty around the duration of the war and the disruption of oil supply. If de-escalation materializes in the short term, EM bonds may rebound amid a resumption of pre-war trends, including diversification away from US-centric portfolios.