Four ways to play ECB monetary loosening

The European Central Bank (ECB) finally acted yesterday in response to growing fears the region is heading in to a deflationary spiral, but how should investors respond?

The ECB has slashed its main interest rate, pushing the rate on deposits in to negative territory in a clear sign it wants banks to lend more - it now costs banks money to hold cash on deposit with the central bank. Draghi also signalled further steps could be taken, having pulled up short of full-on quantitative easing. So how are bond investors responding? Below, managers reveal four strategies to pursue. 1 Covered bonds In the past, the ECB’s response to demand for looser policy has included buying covered bonds. Ahead of yesterday's announcement, Brown Shipley's chief investment...