Record inflows to bonds despite record low yields
Despite bond yields in many markets getting vanishingly low, inflows to bond funds globally have actually accelerated this year.
Insights
Yes inflation is low, but that’s already heavily priced in
Recent inflation readings in Australia and the US have reinforced the strong consensus view that inflation will remain very low for a long time.
Strange behaviour in option markets
Finance text books, reams of academic research and practitioner experience all point to the existence of a “volatility risk premium” (VRP), which is a foundational principal of option selling strategies.
The hidden equity beta in many fixed income funds
The managed fund research company Morningstar recently announced they are splitting their ‘intermediate term bond’ category into two new categories – ‘intermediate core bond’ and ‘intermediate core plus’ bond.
Bonds don’t always diversify equity risk
With global bond yields back near the low end of recent ranges, it’s an opportune time to revisit a theme that’s relevant to portfolio construction today – the bond vs. equity correlation.
Low yields increase the equity beta of credit investments
With yield chasing capital flooding back into credit markets and pushing up bond prices, the behaviour of corporate bonds is changing.
Yield curve inversion
Everyone has an opinion but does anyone really know?
The Hive – featuring Ardea Investment Management
The Hive is a video series featuring ActiveX fund managers. ActiveX’s Sam Morris and Ardea IM discuss the latest trends in fixed income and what investors should be considering.
Positive asset correlations and inflation assumptions
Conventional thinking about bond-equity relationships currently poses a paradox – the resolution to this seeming paradox is the changing bond-equity correlation.
Introducing XARO
Gopi Karunakaran introduces the ActiveX Ardea Real Outcome Bond Fund (Managed Fund) (ASX:XARO).