Gold as an asset class has always provoked sharp divergences of opinion, from those who view it as the ultimate hedge against inflation, to those who will not consider it in portfolios. What cannot be argued with is the recent performance of gold, hitting multiple highs, and, as the chart below shows, sharply outperforming the
The next few months will be a major test for financial markets across the globe as it digests the tariff news emerging from the US. Usually, UK government bonds would provide a safe haven, but these are not usual times. In the immediate aftermath of US President Donald Trump’s announcement, gilts have been down, as
Besides trade tariffs, among the indicators of concerns over growth is the Bank of England having halved its forecast of UK GDP for 2025, from 1.5 per cent to 0.75 per cent. Monthly real gross domestic product in the UK is estimated to have fallen by 0.1 per cent in January, after growth of 0.4
While some investors have written-off bonds in favour of cash, Chris Metcalfe, chief investment officer at Iboss, says this ignores their longer-term role in risk management and return generation. “In recent years many investors have become complacent about the risks that equities face, especially parts of the US market where prices have been driven up
Bond markets are full of idiosyncratic risks at present, but the valuations of high yield bonds at present mean the capacity for that asset class to offer protection against a rapid increase in inflation, according to Mike Scott, who runs the £851mn Man High Yield Opportunities fund. That fund is the top performer in the
Duration and credit risk are two major risks and drivers of returns of the fixed income asset class. So how do investors manage this balancing act? Credit risk is the risk that a company’s creditworthiness may deteriorate, increasing the likelihood that they will either default or be downgraded to reflect a higher likelihood of default.