Giant bond funds 'will trigger next crisis' - GLG's Mawby

The next financial crisis will be sparked by the rise of giant daily dealing bond funds and ETFs, GLG's top performing fixed income manager Jon Mawby has warned.

The largest bond funds around the world have had to deal with an environment of falling liquidity since the financial crisis of 2008. With that in mind, Mawby (pictured) said the increasingly short-term nature of many investors – coupled with the huge increase in flows to funds offering daily liquidity – will likely spark the next financial crisis. He noted funds offering daily liquidity around the globe have grown dramatically, exacerbating the risk of a major catastrophe stemming from the bond market. The issue has come into focus more sharply this autumn with the departure of Bi...