In this podcast Portfolio Manager, Gopi Karunakaran, speaks to Alan Kohler about the Ardea Real Outcome Fund and how it operates.
Conventional approaches to fixed income investing rely on bond yields to generate returns. Most of the returns come from accumulating portfolios of bonds to harvest yield.
2019’s rampant bond rally came to a halt this month as bond yields rose, causing bond prices to fall across most major bond markets.
A common way to think about bond yields is to view them as a cushion that protects bondholders from the potential negative effects of duration risk. As bond yields have now collapsed to very low levels, that protection from duration risk has vanished.
Some central banks are pushing monetary policy into the upside down world of negative interest rates, but rather than success they are creating bizarre side effects.
Since the early 2000’s the name ‘Mrs. Watanabe’ has been used to describe yield seeking Japanese retail investors, who were forced to increase their offshore investment risk taking in response to ultra-low interest rates back home.
Following the sharp sell-off in Q4 2018, credit markets globally have performed strongly in 2019. Having seen a big dip, followed by a quick rebound, how are we now left?
Liquidity is one of those things that doesn’t get much focus until it’s too late.
2019 has so far been a stellar year for bond returns globally. Even a simple passive exposure to long dated bonds has delivered handsome profits that far exceed the average yield of those bonds.
Hedonic adaptation is a psychology term that describes the human tendency of reverting to a relatively stable or ‘normal’ state following either positive or negative life changes.