This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+201114+Cover+Small
Categories:Investments

Bond firms stay on defensive as QE3 rejected

  • Print
  • Comment

Bond managers have held their defensive positions after US Federal Reserve chairman Ben Bernanke decided against a third round of quantitative easing.

In his widely anticipated speech at Jackson Hole, Wyoming last week, Bernanke did not launch QE3 but said the Fed’s policymaking committee will take an extra day at its next meeting in September to discuss the “merits and costs” of further monetary stimulus.

Between December 2008 and March 2010, the Fed issued $1.7trn of quantitative easing and last November it announced a second round worth $600bn.

Aegon Asset Management bond manager Stephen Snowden says he was hoping that Bernanke would announce a third round of QE, which he says would have prompted a credit rally.

Snowden, who manages the £242.5m investment grade bond and £8.9m investment grade global bond, says: “There was a bit of a rally on the equities side but there was very little follow through on the credit side. We are sticking with our current defensive position.”

He says if the Fed announces a further round of QE in the coming months, he will use it as an opportunity to take a more defensive position.
Ignis Asset Management head of credit Chris Bowie says the effects of Bernanke’s speech were not big enough to change the exposure in his £261.1m corporate bond fund. He says: “There needs to be weaker economic data before Bernanke can justify more quantitative easing.”

  • Print
  • Comment

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Taxbriefs Advantage
Advantage is a digital reference source giving unbiased, independent, answers to your technical queries. Subscribe to Taxbriefs Advantage.

Have your sayEdit my profile/screen name

You must sign in to make a comment

AXA Wealth

The Budget: What do people really know?


Fund Data

Editor's Pick



Poll

Do you think the idea of a single investment management charge could work in practice?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments