Choose your bond manager with care

The outlook is complicated with three different scenarios for the bond market in 2009

The current economic outlook is almost unremittingly gloomy. All major Western economies now appear set for recession. In response to the dislocation of the financial markets and in an attempt to shore up economic growth, financial authorities around the world have cut interest rates aggressively and pledged to support the financial system with remarkable amounts of money. However, there are still strains on the financial system and the supply of credit remains restricted. Weaker economic growth has encouraged some investors to become more favourably disposed towards government bonds over t...