Charteris CIO: Bond investors are ill-prepared

Outlook for fixed income investors is grim

With the death of the 30-year bull market in bonds, the outlook for fixed income investors is grim at best and panic-inducing at worst.

From a global perspective, US government bond yields will continue to rise gradually despite their safe-haven status during any geopolitical flare-up.  Euro bonds also look vulnerable amid renewed fears over Italy as well as their poor relative value.  For UK gilts and all other forms of sterling debt, the implications of a possible rise in UK interest rates late this year is also bearish. The idea that somehow investment-grade UK corporate bonds can be immune from rising gilt yields is palpable nonsense as these trade on a spread over a similar maturity government bond.  Are hi...