This is from the Editor of Wealth Manager Magazine.
“There is a big question mark over modern portfolio theory, with the protection offered by bonds showing signs of cracking after the 40-year bull market.
Earlier this year, Bridgewater Associates founder Ray Dalio didn’t hold back when he said the economics behind the asset class had become ‘stupid’ as the threat of inflation and yields at ultra-low levels caused severe dislocation.
However, this £130tn market cannot simply be replaced for asset allocators who have traditionally used its defensive characteristics to balance portfolio risk.
With fixed income caught in a crossroad, this special edition of Wealth Manager assesses whether the 60:40 asset allocation model can survive its biggest test to date. We also question whether alternatives can really provide the security bonds have offered and how real the inflation threat actually is.
Our flagship debate brought together five top fund managers and selectors to reveal how they are plotting a route through this bumpy terrain.
Elsewhere we ask why emerging market debt has had a difficult start to the year following its stunning 2020 and whether the burgeoning Chinese debt market is one of the best shelters for investors.
It’s certainly not a lost cause for bond investors by any means, with ETFs defying the sceptics to pass the Covid test, while the performance of top strategic bond fund managers suggests that those nimble enough can deliver strong returns.
As the storm clouds gather after four decades in the sun, we hope this edition helps you find some clever solutions to dodge the oncoming obstacles in fixed income and avoid looking foolish.”
If you read any of our blogs, we have been questioning bonds. Here’s our summary research