Andrew Jackson, head of fixed income at Hermes Investment Management, points out: “The unwind will have the largest impact on the segment of the market most affected by the recent low-rate environment – sovereign debt.
“Uncertainty over how this extraordinary experiment unwinds means investors have lower confidence in the direction of sovereign debt and the path for rates than in previous cycles.”
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He adds: “This asset class is meant to be safe and boring, but this has not been the case – as evidenced by the recent volatility.”
Mr Jackson suggests any recent volatility in bond markets has recalibrated the market, opening up more opportunities for investors.
eleanor.duncan@ft.com
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