Asset Management

Two reasons to start getting picky in the bond market

Low yields for bonds held over longer periods is causing problems for investors just as returns become less predictable

A rising tide lifts all boats but the fixed income water is likely to get choppier
A rising tide lifts all boats but the fixed income water is likely to get choppier Photo: Getty Images

Asset managers love a good ocean metaphor. We have been known to crow that “a rising tide lifts all boats” and equally vociferously, “it is only when the tide recedes that we will be able to tell who has been swimming naked”.

These maxims have been used so frequently that they have begun to lose their meaning. But, just because they are hackneyed doesn’t make them any less true.

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