Stage set for shareholders to prosper

Fund manager's comment

Following the bursting of the technology bubble and the subsequent bear market, firms were looked on...

Following the bursting of the technology bubble and the subsequent bear market, firms were looked on favourably for strengthening their balance sheets and cutting costs. Some of the principal beneficiaries of this period were corporate bondholders, as companies de-leveraged and sought to enhance cash generation. These moves enabled companies to appear more stable in a period of heightened risk awareness. At the same time, monetary policy at the main central banks was devoted to staving off a possible recession. Long-term interest rates had been falling for many years, as the world adju...