Andrew Mulliner, Portfolio Manager within Global Bonds believes that while there are factors indicating the move towards the end of the economic cycle, the conditions for the ‘end-cycle’ are still missing. Sharing his views on rising rates — not a global phenomenon — he expands on the flexibility of an unconstrained fixed income strategy.
- While key factors such as leverage, animal spirits and liquidity tightening are pointing towards the end of the economic cycle, the end piece (normally an exogenous shock) is missing
- Rising rates can be a good thing or bad; investors need to be aware of the underlying reasons and also to recognise that there are many parts of the world where rates are not moving upwards.
- Traditional fixed income strategies, such as those that are benchmarked, carry unwanted additional risks, which an unconstrained strategy can mitigate
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