Index-linked paper offering corporate bonds alternative

Investment managers at Morgan Stanley Quilter are currently switching clients out of corporate bonds...

Investment managers at Morgan Stanley Quilter are currently switching clients out of corporate bonds into floating rate notes and index-linked paper. Managers at the house, which typically deals with client portfolios of upwards of £200,000, are concerned about continuing low yields and gilts and worried that a market shock could hit liquidity in the bond sector. In response, investors looking for short-term bond market exposure are being moved into floating rate notes, corporate paper with returns that are fixed every 90 days linked to Libor. Charles Maisey, executive director at Morgan...