Snowden: Market gyrations will provide opportunities for active managers

Corporate bonds have recovered strongly over the last 12 months and we believe the recovery has further to run, albeit at a more moderate pace.

However, the path to long-term normalisation will be bumpy and what will be considered normal in future may not be what investors became accustomed to in the ‘Goldilocks’ years of the mid-noughties. Sovereign risk is uppermost in investors’ minds and credit risk has been transferred from the private to the public sector. The taxpayer has become lender of last resort to RBS and Lloyds. On behalf of the taxpayer, the Government has continued to spend, attempting to fill the void left by the slump in demand. We have had two recent sovereign-related market wobbles, Dubai in December and G...