Bond returns likely to confound the skeptics
Global bond returns have been particularly strong over the last 2-3 years. In our view, central bank policies have been driving bond yields lower. Large-scale asset purchases in the US, Japan, Europe and, most recently, the UK have been reducing the supply of the highest quality pools of liquidity: government bonds. At the same time, increased liquidity requirements for banks and negative interest rates have created greater demand for government bonds, particularly those with positive yields. The implication of unconventional monetary policy becoming conventional is that bond yields are likely to stay low, and bond returns can continue to confound the skeptics. (James Alexander, Co-Head of Global Fixed Income & Head of Australian Fixed Income)
Nikko Asset Management is one of Asia’s largest asset managers, providing high-conviction, active fund management across a range of Equity, Fixed Income, Multi-Asset and Alternative strategies. In April 2021, Yarra Capital Management acquired...