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Re-thinking fixed income investing

Where next for corporate bonds? With so much going on in global markets, there is much for advisers to consider when reviewing fixed income investments and overall asset allocation strategies for client portfolios. Here we look at some of the key issues affecting bond markets at the present time.

You can read and download the supplement here.

These are challenging times for fixed income markets. The Federal Reserve has switched direction on monetary policy, raising US interest rates in December – the first upward move in nearly a decade.

M&G fixed income investing

At the same time, economic statistics are mixed and variable, making it difficult to build a clear picture of the likely direction of global economic growth.

There has already been significant fluctuation in financial markets since the start of 2016 and many believe this is poised to continue.

According to the assessment of the M&G fixed interest team, valuations in the developed government bond market currently look extreme.

The income available from developed market government bonds is at extremely low levels, while in those areas more exposed to the economic cycle, the income is still relatively high, reflecting investor fears over the pace of global growth.