UK bond market is wrongly pricing risks of supply and inflation

For some time we have primarily focused on defensiveness which has proved pertinent in terms of performance.

How managers are positioned now could well determine how well they cope with any market corrections. The US bond market has seen the biggest yield curve shift of the major markets and subsequently there may be more value in the US market than the others. Throughout the year, the short end has been anchored by the near zero interest rate policy and the five- to 10-year yields have seen the steepest rise. We believe the short-end of the US market has a lot to lose and little to gain and, as such, we should look further out along the curve. Yet we must be mindful of our exposure to rising i...