Roberts: Bond managers could face big trouble if inflation rises post QE2

It has been easy to make double-digit returns in the bond market over the past year, said Aegon's David Roberts, but managers will face a challenge if further QE causes inflation to rise.

Roberts, who runs the £71m Strategic Global fund alongside Phil Milburn, said the only real surprise has been government bond yields remaining low. “These now look stretched and, with most jurisdictions outside the US showing signs of a recovery, any bond manager would worry growth and inflation will come back to haunt the market,” he said. “It may be wrong to further stimulate the economy, and it will be a difficult proposition to try to sell to clients.” Background Milburn and Roberts have been running the Dublin-domiciled Strategic Global Bond fund since its launch in November...