Are bond markets telling us rates will rise sooner than expected?

GLG's strategic bond fund manager Jon Mawby has warned investors to be wary of exposing their cash to interest-rate sensitive bonds such as gilts amid a surge in demand for protection.

Mawby, running the GLG Strategic Bond fund alongside co-manager Steve Roth, said demand for floating rate notes which protect against interest-rate rises had jumped dramatically since the start of 2013. While the manager said central banks were unlikely to embark on a round of interest rate rises given the parlous situation facing economies such as the UK, there is still a risk external shocks could force their hands. "We are allocating to non-interest rate sensitive assets now," Mawby said. "We are concerned about rates and half the portfolio is now in those trades." Mawby's fe...