Strategic bond investors have been reducing their allocations to risky parts of the market and cutting duration further as global government bonds sold off last week, as they await an opportunity to buy back in when prices bottom out.
M&G's Nicolo Carpaneda, investment director within the fixed interest team, also sees opportunities emerging from the sell-off.
"In volatile times such as these, short duration will remain key across portfolios," he said.
"Emerging markets have sold off on the back of dollar strength and rising rates in the US. In the medium term, we can expect opportunities opening up if the sell-off continues. Some emerging markets have improving fundamentals and not all (e.g. India, Eastern Europe) are heavily linked to the US economy."
However, he said no action had been taken on portfolios as yet.
Invesco Perpetual's co-head of fixed interest, Paul Causer, also does not see the need to do anything with portfolios right away in response to the post-election sell-off.
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"We need to wait and see if this is a knee-jerk reaction or the beginning of a more prolonged change, where we may get even more bearish on bonds. Inflation is the killer of fixed income, but there is no intellectual basis to argue a big inflation genie is coming out of the bottle."
He added: "Notwithstanding the Trump win, the markets did need to correct. I am not calling a really bad bear market, and I do not think gilt yields are going to go back to 2%-3% any time soon, but I think it will be more difficult to make a capital profit for a while."
Market outlook
As the market prices in a "normal" rate hike cycle next year, OMGI's Johnson believes bonds could see another rally "that would pay for Trump's fiscal expansion".
"More rate rises now equal less inflation later on, prompting the yield curve to flatten as rate expectations are priced in," she explained. "This would reward savers for saving, create an incentive to invest and drag down the long end, which is where the Federal government will likely fund itself."
However, RLAM head of global high yield Azhar Hussain is worried about uncertainty over the Fed leadership, with chair Janet Yellen expected to step down at the end of her term, to be replaced by a "Trump appointee".
"The knee-jerk reaction of buying the dip in credit becomes more uncertain without a steady hand on the monetary tiller," he said.
