For investment grade corporate bonds it will be the rate move that dominates total returns short-term

One of the fundamental implications of quantitative easing (QE) in the bond markets has been the impact of pricing of the highest quality bond assets. Investors pay a cost (in terms of reduced yield) to own the safest of assets. But increasingly they get pushed down the credit curve so over time ratings buckets become […]

30 September 2016 by Chris Iggo

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From Arkwright’s to Amazon

Napoleon Bonaparte once derisively described Britain as a “nation of shopkeepers”. It was and is a rather lame insult, but like many such comments contains more than a grain of truth.  For despite our tiny geographical presence the UK remains one of the largest economies in the world. So shopkeepers and business people we Brits […]

28 September 2016 by Steve Herbert

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How to buy equities after Brexit

Almost three months on and the UK stock market has soared since the Brexit vote, up more than 10% from June 241. It’s been a nice morale boost amid some fairly gloomy predictions for Britain’s future, not to mention a welcome lift to returns for investors. Market reactions so far have been mostly driven by […]

22 September 2016 by Darius McDermott

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From austerity to neutral, and beyond?

Bond yields have risen over the last week. Not by much but by enough to wake up investors to the risks of depressed risk premiums and the dangers of central bank dominance. The policy backdrop might not change materially any time soon but there is enough talk about different policy directions for investors to understand […]

16 September 2016 by Chris Iggo

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Central bankers remain – more or less – in charge of bond markets

Al’right guv? – Central bankers were centre stage in terms of the media this week with Mario Draghi telling reporters at the European Central Bank’s (ECB) post-governing council press conference that he and his colleagues had not discussed extending quantitative easing (QE) in Europe, and Mark Carney telling the Treasury Select Committee that he felt […]

9 September 2016 by Chris Iggo

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Sterling bond investors have done very well, but it’s time to consider the inflation risks

Inflation has been non-existent in the developed world this year but inflation-linked bonds have performed very well in total return terms, and nowhere more so than in the UK. This has been driven mostly by lower real yields, reflecting both the grab for duration and the need to hedge future inflation risks. The returns surely […]

2 September 2016 by Chris Iggo

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Brexit and the phoney war

In September 1939 the UK declared war on Germany.  Immediately after this announcement the air-raid sirens were sounded causing widespread panic in London.  Yet for most Brits the horrors of war were not to become apparent for another 8 months.  This period of unexpected calm became known in the history books as the “phoney war”. […]

1 September 2016 by Steve Herbert

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The Bank restarts the printing presses but will it boost aggregate demand?

Re-starting the printing press – Reading about the Bank of England (BoE) cutting the bank rate to 0.25% and re-starting quantitative easing (QE) while I was away got me re-thinking about the effectiveness of monetary policy and how exactly QE is supposed to deliver higher growth and inflation. It is well understood that the economic […]

22 August 2016 by Chris Iggo

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Pension Freedoms: The long and the short of it…

Last week’s pensions press release by HM Treasury/ HMRC struck a rather triumphalist note even within its title – “Britain’s pension revolution goes from strength to strength” The release went on to proudly state that since April this year “159,000 people have accessed £1.7 billion flexibly from their pension pots”. Impressive numbers I agree, and […]

2 August 2016 by Steve Herbert

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Post Brexit, productivity is key for Britain and employers can help

In January – shortly before the date of the EU referendum was announced – I wrote this article for Mindful Money in which I questioned how UK business would fare in the event of a Brexit decision.  My concern centred on the productivity and engagement deficit of Great Britain when compared to most other members […]

25 July 2016 by Steve Herbert

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