Investors defensive as market fears abound

Fear has refocused investors' attitudes towards risk, namely the fear of higher inflation, higher in...

Fear has refocused investors' attitudes towards risk, namely the fear of higher inflation, higher interest rates and the potentially adverse impact on corporate profits. Markets have responded with increased volatility so that investors have sought a safe haven by buying gilts more than credit. This weakness has been further exacerbated by the reclassification of some financial preference shares in the US to equity, spreading contagion beyond other financials and into wider credit markets. While equity investors offload high beta areas such as emerging markets and commodities, bond investo...