Oliver Blackbourn, Portfolio Manager on the UK-based Multi-Asset Team, considers the impact of monetary policy stimulus on government bond yields worldwide, and discusses what this may mean for investors looking to maintain risk and diversification in their portfolios.

Key takeaways:

  • Investors are likely to have to work their investments harder after a decade in which loosening monetary policy has driven all asset prices, in aggregate, higher.
  • The latest wave of monetary policy stimulus has seen ever more policy rates from central banks head towards negative territory, dragging government bond yields down with them.
  • A more flexible approach may be required for those unwilling or unable to pay up for portfolio insurance, such as options.