General Motors' sell off sparks decline in bonds

Fund of fund managers are currently holding the absolute minimum in fixed interest and, despite the ...

Fund of fund managers are currently holding the absolute minimum in fixed interest and, despite the recent correction, find it difficult to argue the case for this asset class. Such an underweight position has been beneficial amid the recent sell off in corporate bonds, prompted by General Motors' profits warning. General Motors accounts for a significant part of US and European fixed interest indices. The group's announcement, on 16 March 2005, resulted in the biggest weekly decline in corporate debt since 2003. The bonds currently represent a large part of investment grade bond indic...