Rate rises or not, investors are having to make crucial decisions in fixed income allocation. Gavin Haynes, managing director at Whitechurch Securities, still believes the “lower for longer” rate environment will remain.
“We don’t see a significant increase in bond yields any time soon,” he says.
“The US is pricing in three interest rate rises in 2017 and there is little scope for monetary tightening in other major developed economies.
“However, it would be no surprise to see yields drift higher if the move away from monetary to fiscal policies are pursued globally.
“As a result, we will continue to avoid government bonds and skew our exposure to less interest rate sensitive areas of bond markets.”
