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All Aboard! Next Stop: Fixed Income Absolute Return

14th February 2017
by Andy Bevan & Elina Theodorakopoulou

The fixed income asset class has produced spectacular returns for the past three decades.

On a risk-adjusted basis, returns have been superior to those produced by other asset classes. The current low level of global yields implies it will not be possible to repeat historical returns. Indeed, increasingly robust global growth and higher inflation point to the risk of very low returns and sustained periods of losses for bond investors in the future.

The sell-off in global government bond markets since the election of President Trump provides a timely reminder of the case for Absolute Return strategies, which will become increasingly attractive to traditional fixed income investors. Such strategies have no long market-directional bias and seek to generate positive returns in all market conditions across the economic and interest rate cycle.

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