Fixed income decoded: Looking for fresh options

Fixed income assets have enjoyed a good run in recent years. However, with changing interest rates on the horizon, where might investors find the best opportunities in future?

A key factor for this performance has been the ‘financial repression’ in response to the global financial crisis of 2008. Policymakers loosened monetary policy very forcefully thereafter, pushing inflation-adjusted (‘real’) rates on core government bonds below zero, prompting savers to look elsewhere in search of additional returns. In doing so, investors have often taken on more risk. The debt issue erupted in the eurozone and put the very existence of EMU at risk. Investors moved out of periphery bonds in search of safety, but central banks’ commitment to loose monetary policies and al...