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60 seconds on why bond volatility brings opportunity

In our latest 60 second video, Schroders Head of US Multi-Sector Fixed Income, Andy Chorlton, explains the two counteracting forces which will bring volatility - and opportunity - to US bond markets.

10/06/2015

Andrew Chorlton

Andrew Chorlton

Head of US Multi-Sector Fixed Income

Schroders

Diverging monetary policy

The rest of 2015 could an exciting time in the bond market.

We have two contrasting features which will influence what happens:

1. The amount of liquidity that continues to be pumped into the financial system by central banks around the world. For example, the European Central Bank has launched a trillion dollar quantitative easing programme.

2. The Federal Reserve (Fed) is expected to raise interest rates by the end of this year. The market fully expects the Fed to raise rates by December, if not September.

Volatility creates opportunity

Those two counteracting forces have the potential to create volatility for the remainder of the year, which creates opportunity for active fund managers.

The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Limited 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

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