More bond shocks to come, warns Invesco Perpetual

Natalie Kenway
clock

The bond market faces "strong headwinds" for some time as summer volatility returns and markets anticipate interest rate hikes, according to Invesco Perpetual's fixed income team.

The managers warned rising interest rates will inevitably impact bonds while liquidity and the lack of quality new issuances in the market is also a challenge. Michael Matthews, co-manager of the £5.5bn Corporate Bond fund, alongside co-heads of fixed income Paul Read and Paul Causer (pictured), said: "In January, we saw 10-year [UK] government bond yields at 1.3% and now they are over 2%. There is a quite a move in quite a short space of time and a 5% capital loss. "It is quite a strong headwind. Rates will go up and yields will go up. Those headwinds will be around for some time." ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Fixed Income

Partner Insight: Vanguard's Fixed Income Update - Yields decline on dovish Fed rhetoric in November

Partner Insight: Vanguard's Fixed Income Update - Yields decline on dovish Fed rhetoric in November

The key themes in global bond markets over the past month.

Kunal Mehta, Head of Fixed Income Specialist Team, Vanguard, Europe and Suparna Sampath, Fixed Income Product Specialist, Vanguard, Europe
clock 01 February 2024 • 8 min read
Bond market: Forget the crystal ball and focus on the easy win

Bond market: Forget the crystal ball and focus on the easy win

Fixed income offers more value now than at any time in the last decade

Darius McDermott
clock 28 November 2023 • 5 min read
Why it pays to be nimble in the fixed interest market

Why it pays to be nimble in the fixed interest market

Agility and active management needed when 'the chips are down'

Jerry Wharton
clock 21 September 2023 • 4 min read