Bond managers take action to protect against 'wrong type of volatility'

Fixed income managers have been forced to adopt protective measures in response to the huge spike in volatility seen in bond markets in recent weeks.

 Earlier this month, the yield on 10-year German bunds rose above 1% for the first time since September, up from 0.05% just a few weeks ago. This headline rise masks a series of volatile trading sessions in which yields moved sharply lower as well as higher. Yield volatility on 10-year bunds has climbed to nine times the 15-year average, according to Bloomberg, with one measure of 30-day volatility surging to 300% in May. The measure had not gone above 100 before this year, according to data compiled by Bloomberg going back to the middle of 2005. Aberdeen sets aside $500m to meet...