Local currency bonds in India, Mexico and Brazil are what BlackRock has bought, and market overreaction when the US Federal Reserve raises interest rates could be the time to buy more emerging market assets, said Rick Rieder, chief investment officer of fixed income fundamental portfolios.
The initial market reactions to the surprisingly strong victory for the Tories in what was touted as the closest election in a generation were positive, Sterling strengthened, markets rose and inboxes flooded with commentary.
The FTSE 100 spiked briefly through 7,000 points on Friday and sterling strengthened as investors woke to news that the Conservative party had beaten even the most optimistic expectations.
Investors have been getting a rather sharp reminder of just how much interest rate risk is present within government bonds.
Holders of short-duration gilts should be hoping a Conservative-led government emerges from the General Election, says Newton Investment Management’s Howard Cunningham.
Policy divergence will reach a breaking point and either drag the US and UK back into quantitative easing or trigger widespread reflation, says Rathbones’ Bryn Jones.
Indian reforms are crucial in order for economic growth rates to be sustainable, says Invesco Perpetual’s Stuart Parks, but investors need to have patience.
As soon as everyone came back after Christmas pre-General Election hysteria kicked in, with all the retracted and regurgitated promises, opinion polls and policy bashing that we have come to expect.
A Chinese clearing house is considering the launch of a “Bond Connect” scheme which would mirror the Stock Connect initiative, creating an investment link between the mainland and Hong Kong debt markets.
The Fed has signalled a rate rise, and dollar strength has played its part, but it will take unforeseen events to halt the US equity rally.
The recent rally in Hong Kong shares has prompted asset managers like BlackRock to become selective on Chinese equity sectors.
Schroders made a pre-tax profit of £149.6m in the three months to 31 March, the firm has announced in its interim management statement.
