The UK's new coalition Government is preparing to make large-scale spending cuts in an attempt to reduce the country's worryingly large Budget deficit, and managers are bracing themselves for the possible impact.
Fund managers are expecting sterling to bounce back later this year after being one of the casualties of strong currency volatility this year.
M&G's Richard Woolnough has initiated a number of derivative positions in sovereign bond markets to try and profit from the volatility caused by recent eurozone pressures.
The expected rise in capital gains tax could attract investors towards venture capital trusts, experts say, because the vehicles are exempt from both capital gains and income tax.