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There is no alternative to bonds, says Dennehy

Dennehy Weller managing director Brian Dennehy says investors are piling into bonds as they face Hobson’s Choice.

He says the big difference between the bond spree and the dotcom bubble is that investors are not “euphorically” charging into corporate bonds as they did with tech. “In contrast, the buying is because investors are being cautious, sensing Hobson’s Choice,” he says.

Dennehy does not believe bond valuations point to a bubble. He says: “Current yields imply 40 per cent of all investment-grade bonds will go bust over the next five years, which is silly. Even if you exclude financials, the implied default rate is 15-20 per cent, compared with a historic peak in the UK of 4 per cent.”

Hargreaves Lansdown investment manager Ben Yearsley says: “Lots of people are saying you should have bonds. The prices are low, indicating there is no asset bubble. If you are seeking income, there is a case for Hobson’s Choice to a degree but you can go elsewhere for income, depending on the risk you want to take.”


Annual Kickout Plan from Keydata

Keydata has launched its first five-year Annual Kickout Plan, which offers investors the choice of early maturity at each plan anniversary, with a rising bonus facility.

New Star underperformers get new managers

Investors in the underperforming New Star Higher Income and Sterling Bond funds can expect changes to the portfolios, after manager changes last week.Following the completion of the mer­ger of Henderson and New Star, Toby Thompson manager of Higher Income and Phil Roantree, manager of Sterling Bond, will not move to Henderson. In Thompson’s place steps […]

Trouble ahead - thumbnail

Pensions: trouble ahead?

The pace of change in the pension’s space has been little short of astonishing, and has left thousands of employers struggling to keep their pension policy compliant, and also on the right side of current best practice and governance. Many employers, and indeed many in the pensions industry itself, would like to see a period of no change during the next term of government. This would give all sides a chance to catch up and draw breath. 


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