John Pattullo, head of retail fixed income, and Jenna Barnard, deputy head of retail fixed income at Henderson Global Investors, explain why with low inflation, low growth, and low defaults, flexibility is key in the bond market.
Going into January, investor positioning became very extreme. Following a strong year for equities, risk assets were favoured greatly, while bonds became less popular. But a bout of emerging market volatility, hand-in-hand with broadly weaker fundamentals going into 2014, exposed the overbought conditions and led to the sell-off. Economic data released in January raised concerns for growth in China, while a few relatively weak data releases from the US, confused and confounded by bad weather, left investors unsure about the global economy. Given that investor positioning was extreme goin...
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