Sticking to the knitting — bond investing in a deflationary world
4 minute watch
2014 has, so far, been an extraordinary year for bonds. Coming into the year the consensus was to be short bonds and for equities to outperform. In fact the opposite has happened. More recently, a big deflationary pulse has caused sovereign bonds to rally strongly.
John Pattullo briefly explores the drivers of this; mainly the fear of lack of growth and lack of inflation, really in Continental Europe but especially in Germany, while the American markets seem to have seized on this and sold off. In this environment of low growth, low inflation, muted volatility and very low defaults, he feels that carry (yield) will continue to be the dominant bond investment strategy.
John sees pockets of volatility as a necessary evil as valuations re-adjust; and as valuations come up he expects to add a little risk to his portfolios coming into the year end.
Nothing in this video is intended to or should be construed as advice.
These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
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4 minute watch