Four charts that sum up the bond challenge
By International Adviser, 29 Oct 15
A great deal has already been written about the challenges facing asset allocators in a world where bonds yields have been pushing lower for the better part of 30 years.
The second point to consider, according to Stevens is that volatility is lower than what many people expect to be the case.
“According to the Merrill Lynch “Move Index” which gives an indication of bond market volatility, somewhat surprisingly, volatility is currently significantly lower on average than in the pre-crisis era,” he said.
Adding: “This lower volatility means that although fixed income portfolios can exhibit lower volatility, the opportunities for high conviction directional trades (underweight / long or overweight / short ) are much harder to come by