Chris Rodgers, founding partner and UK equity fund manager at FOUR Capital Partners, explains why the ‘safety' premium on defensive bond-proxy stocks is no longer warranted.
The sharp rise in bond yields from the all-time lows hit last year has had a significant impact on all markets, and served as a wake-up call to investors. In particular, to those investors who thought they were taking cover in ‘safe-haven’ assets. This is a timely reminder that risk, in the most pragmatic sense, is not best represented by the volatility of an asset, but rather by the ultimate risk of experiencing a loss. In this respect, risk is surely a function of the price you pay. Ever since the 2008 financial crisis, investors have remained nervous and unusually risk averse. This...
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