Bill Harer and Michael Count, managers of the CF Canlife Corporate Bond fund, assess which fixed income strategies could catch out investors again next year.
A useful concept from time to time is the so-called ‘pain trade’. It is the idea the market will often move in the direction that causes the most pain to participants. The justification for taking such a masochistic view is it tells us something about positioning. For example, if the majority of investors think the bond market is going down, and have sold bonds to take themselves underweight, then the pain trade will be for the market to go up. If the market does go up, they are likely to move to cut positions in order to limit losses, in this case by buying back some of what they ...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
