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It's tough being a bond fund manager
You wouldn’t have thought so, but bond portfolio managers need to be more skillful than a decade ago. Central bank asset purchase programs have made core treasury markets a one-way bet and the mortgage-backed securities debacle still turns investors off complex structures. So, surely the job of bond manager should be easier, even plodding and dull.
Not according to a survey conducted by Citigate for NN Investment Partners, a leading Europe-based fund manager.
“The research reveals that 61% of institutional investors believe asset managers must address changing levels of liquidity better than they did 10 years ago while 42% said they have to be able understand and invest in wider geographies better than they did then. Other challenges cited that require greater attention included the ability to invest across wider credit ratings (39%) and managing overload (30%),” noted Citigate.
Far from boring then. Indeed:
“Respondents said the most attractive quality in the process of a fixed income strategy is risk control (57%), followed by a focus on controlling duration and matching liabilities (39%), the flexibility to invest in a wide range of investments (35%) and a focus on avoiding defaults (31%).”
“Markets are in a very different place from where they were 10 years ago. Changes in global conditions, economic policies and financial markets have forced investors to adapt, and being able to adapt quickly will become an even more important skill,” said Sylvain de Ruijter, head of global fixed income at NN Investment Partners.
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