Bonds

FIVE CHALLENGES CARNEY FACES

Kames Capital has bought into the record $17bn corporate bond issue unveiled by Apple yesterday, saying the deal "has to be a buy" - but other fund managers are not so sure.

Lakshman Harendran, member of the global convertible bond team at RWC Partners, argues that convertibles are an ideal investment for today's high-risk, low-yield environment.

Kira Nickerson discovers that some fund managers are beginning to re-examine this previously unpopular asset class.

With banks and brokers under pressure to raise capital levels and reduce risk in the aftermath of the credit crisis, many trading activities have been substantially (and permanently) cut back.

Standard Life Investments' head of credit Andrew Sutherland is to retire from the group after a 30-year career.

Bond managers have been steadily increasing the use of credit default swaps (CDS) in their portfolios as liquidity issues which emerged in the corporate bond space last year continue to plague the sector.

Chris Bowie has taken bank exposure to its lowest ever level in his £285m Ignis Corporate Bond fund amid growing fears bondholders will be wiped out if there is another crisis.

Bill Gross, the manager of the world's largest bond fund, said Chancellor George Osborne needs to ditch austerity and 'spend money' if the UK is to emerge from its current economic malaise.

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