Bonds find strength through diversity

Newcomers may be surprised at the sheer size, diversity and complexity of bond markets. The estimate...

Newcomers may be surprised at the sheer size, diversity and complexity of bond markets. The estimated market capitalisation of the US bond market is nearly $25,000bn and the euro market is catching up fast. Even the comparatively small sterling market possesses great diversity. In addition to the 78 obligations of the UK Government, gilts, borrowers include overseas governments, local authorities, supra-national organisations, banks, other financials and corporates. Maturities range between a few days and 50 years or more, while some bonds are perpetual. Likewise, coupons vary widely,...