David Jane: Bonds, huh - what are they good for?

With bond yields heading higher in most markets, leading to capital losses across the fixed income spectrum, it is easy to question the role of the asset class. The US Federal Reserve is seemingly committed to continued rate rises, and the ECB to withdrawing from quantitative easing, so rises in yields look set to continue. The equity market's recent setback has not seen a material fall in bond yields. If anything, the opposite has occurred. Bonds' promise of inverse correlation is not bearing fruit.  The equity market has been fretting about an economic slowdown all year, but this ha...