Deep Dive: Governments' 'lack of financial discipline' could upset bonds' positive outlook

Positive outlook on the asset class

Fixed income, and bonds in particular, are “set to deliver some of the best returns investors have seen for a long time”, according to Raymond Sagayam, CIO fixed income Pictet Asset Management.

 However, he emphasised that "persistent price pressures and a lack of financial discipline on the part of governments" must not get in the way. According to Sagayam: "Investors now have access to defensive and income-generating assets at inexpensive valuations not seen for many years," notwithstanding "these potential hazards". The fixed income asset class, as a whole, suffered a torrid year in 2022, with the classic equities diversifier falling in lockstep with the asset class. Allianz GI's Riddell: Looming credit meltdown risks creating corporate bond fund illiquidity shock N...