Yielding to a change of sentiment
As German Bunds have dictated the direction of the rest of the capital markets in recent weeks, William Hobbs, Head of UK and Europe Investment Strategy, asks Rupert Howard, Senior Portfolio Manager, about his exposure to government bonds and what the future may hold for the US dollar.
As fears of deflation have unwound, bond markets have moved back to where they were six months ago. However, the impact on portfolios has been minimal as Rupert has always maintained very little exposure to the European government bond space due to the poor value on offer.
Meanwhile, the US dollar has been somewhat directionless recently as expectations of when the Fed will raise rates have been pushed further back. However, Rupert is confident that the dollar’s structural bull market remains intact and believes that holding US dollar assets in portfolios should be rewarded by the dollar uptrend going forward
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