As investors are faced with the twin spectres of short-term deflation and long-term inflation, long-only fixed-income managers face a difficult environment. In such a situation, an absolute return approach to fixed-income investing could be worth considering.
Although the first three months of 2009 saw a continuation of the financial turmoil that had overshadowed global markets for much of 2008, there were some remarkable developments. Unprecedented state intervention and a further deterioration in the economic environment outside of the financial sector saw the macroeconomic debate move from discussions of conventional strategies to more elaborate plans and fiscal stimulus packages. With official interest rates already close to zero in some countries, quantitative easing appears to have become the policy du jour of many developed central banks....
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