Stopford prepares for 'sharp' bond yield reversal

Investec's joint head of fixed income John Stopford is positioning his portfolios ahead of an expected sharp reversal in bond yields.

The manager sees good relative value in corporate bonds and emerging market debt, as well as inflation-linked bonds which offer protection against rising inflation. "In addition, currency markets continue to offer opportunities to generate returns. Using derivatives to manage interest rate risk allows us to make the most of these areas while limiting the impact of rising government bond yields on our portfolios," he said. "Investors are becoming anxious about the potential for capital losses if and when yields begin to rise from levels which are currently close to their lowest ever on...