Will low yields still be the norm for bonds in 2015?

Changing economic conditions mean fundamentals won't always be the core driver of markets, which is why corporate bond managers must be more active and nimble to generate returns in 2015, says Simon Blundell, manager of the BlackRock Corporate Bond fund.

Valuations this year have, in many cases, become stretched while rates remain low, and this has created tough challenges for traditional bond strategies. Credit spreads have tightened in recent years, but there is scope for them to tighten further. However, managers will need to adopt a more active and flexible approach, concentrating on fundamentals, to drive returns across a range of market environments. Bond markets continue to be buffeted by concerns over global growth and liquidity, while the timing and impact of expected interest rate rises are proving difficult to predict. There i...