Thematic approach to bond investing key for 2011

BOND INVESTING KEY FOR 2011

We are only a few weeks into the year, and already there are some interesting developments for bond investors to keep a keen eye on.

With cash continuing to yield next to nothing, we are seeing a number of cash-like ideas come to the market, called ‘floored floaters’. These are effectively structured-type products, and there may be increased issuance in this area as inflation pressures gradually seep through. We are also watching with interest the potential impact of new Basel regulations, which effectively recommend senior debt should have some kind of ‘bail-in’. This means the senior-debt holders will no longer rank on an equal footing alongside depositors, and could have huge implications for banks as it pushes ...