Bonds

Issuance in the US corporate bond market has reached record levels in the first quarter of 2012 as low borrowing costs and an improving economic backdrop spurred on borrowers.

The so-called ‘fear index' is increasingly serving as an indicator of future high yield bond performance, according to Dave Bowen, manager of the $3.5bn Muzinich Short Duration High Yield fund.

ON BONDS

As the volatility index trends downwards investors should be selling - not buying - risk assets, said Kames Capital's David Roberts and Phil Milburn as they warned the eurozone crisis will return to haunt markets.

The government's plans to issue gilts with a maturity greater than 50 years, or even with a never-ending life, have been criticised as little more than a 'gimmick'.

Chancellor George Osborne has confirmed the government will consult on launching perpetual gilts and gilts with a life longer than 50 years, despite a wave of criticism from potential investors.

Guillermo Osses, manager of HSBC's $1bn GEM Debt Total Return fund, has reduced risk in his portfolio, expecting emerging market debt to pull back after a strong start to the year.

100-YEAR GILTS

100 YEARS OF DEBT

The longest losing streak for 10-year US treasuries since 2006, coupled with a marked rise in other ‘safe haven' bond yields, poses some difficult questions for bond investors.