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.
Continuing the theme of a dearth of obvious high conviction directional trades, Stevens said is the fact that different developed markets countries appear to be committing to different monetary policies in the medium term
Stevens does, point out however, that while directional trades may be thin on the ground, “It does create the opportunity to use relative value trades to take advantage of the different monetary policies by simultaneously going underweight / short the bonds of those countries expected to be hiking rates while going overweight / long the bonds of those countries we expect to see continuing to ease monetary policy.”