Ruffer: Gentlemen no longer prefer bonds - and beware a '1994 moment'

The prospect of a sell-off in both equities and bonds, akin to that seen in 1994, is a "very real concern", according to Ruffer investment directors Hamish Baillie and Steve Russell.

Noting that bonds suffered their fourth worst month in the last 20 years in May, the managers of the Ruffer Investment Company pointed to the "paradox" of improving economic news leading to greater volatility and even market sell-offs. Yields rose in every major jurisdiction last month, with the exceptions of Portugal and Slovakia, Baillie and Russell said in their monthly report, as improving data raised expectations of a slowdown in the US's quantitative easing programme. "Gentlemen no longer prefer bonds, to judge by last month's events as bond markets suffered their fourth worst m...