2015: A Difficult Year for Bonds

EU QE, more than 30 interest rate cuts around the world, building uncertainty about the timing of a Federal Reserve rate rise – where does the last 9 months leave bonds?

BlackRock 7 October, 2015 | 5:08PM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, BlackRock’s fixed income team asks where does a tumultuous last nine months leave bonds as we head towards 2016?

The central bank divergence we expected this year has yet to fully emerge. US economic improvement – not least labour market conditions – would seem to support a fi rst Fed hike in almost a decade. Yet the Fed remains very cautious and, given the insulated nature of the US economy, surprisingly focused on the international picture. Should volatility calm, the Fed could still raise rates in December. However, the Fed’s decision to stay put has served to increase uncertainty around the global growth picture rather than reduce volatility.

Emerging market debt now offers an opportunity

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BlackRock  has assets under management totalling $3.8 trillion across equity, fixed income, cash management, alternative investment, real estate and advisory strategies (as at 31 December, 2012).

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