Six ways to adapt to a new bond world

Bond investors find themselves in a challenging and uncertain environment, says Hermes Investment Management co-head of credit Fraser Lundie (pictured). Event risk, such as the so-called 'taper tantrum' of 2013, has already forewarned investors of how sensitive markets can be if the monetary policy injection even appears on the point of being taken away, he says. Meanwhile, central bank bond buying is distorting valuations as prices move further away from fundamentals. "What we do know is people now must accept, if they are investing in assets that are yielding close to or below zero,...