Seneca duo: Ditch bonds ahead of painful correction

Seneca Investment Management has suggested investors move out of fixed income in order to avoid getting caught out by a painful correction.

Multi-asset managers Alan Borrows and Simon Callow said the recent run for fixed income, which has accelerated again this year, is now at an end - with those slow to exit risking capital losses. Despite the gains made in 2014 - a year in which 10-year gilt yields, for example, have dropped from 3% to a current level of 2.5% - the duo said the headwinds had mounted and recent gains have left sovereign debt looking even more vulnerable. Borrows said: "The quantitative easing stimulus programme has floated many boats but once the tide goes out we will see fixed income sink. "As such, ...