Misplaced fears in defensive assets

Livewire Exclusive

Livewire Markets

Bonds are typically viewed as a defensive component of an investor's portfolio. They tend to perform best when your riskier assets are doing poorly. Stuart Dear, Deputy Head of Fixed Income at Schroders Australia says the analysis they've conducted shows this relationship has held true in all but one circumstance over the past 20 years.

However, with the impact of QE on all asset classes, there's been concerns that bonds no longer offer these same defensive characteristics against riskier assets like equities. Dear argues that evidence on correlations breaking down or diversification becoming less effective is mixed. In this short video, he explains why investor fears about the defensive nature of bonds are misplaced. 

 

Enjoy that?

You can read further insights and analysis from Schroders Fixed Income team here


2 contributors mentioned

Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.