Bonds represents a state of indebtedness, a bond is a loan issued by governments and corporations to finance particular projects such as building roads or research. These bonds can be traded by investors who will then receive the future payments - including interest known as ‘coupons’ - until the bond matures.
Bonds with a fixed interest rate are also known as ‘fixed-income securities’ because the corporation loaning the money can calculate the total sum they’ll receive if a bond is held until it matures.
During a period of high interest rate, bonds can become more lucrative as the yield on bonds increases. If the country’s central bank keeps interest rates low throughout the lifetime of the bond, then the yield isn’t likely to be high so they price of bonds is pushed higher.
Find the latest bond market news with MacroMatters, from rates fluctuations and government policies.
Our Asset Allocation team includes dedicated and experienced strategists whose focus is to forecast the outlook and the stage of the market cycle for their specialist asset class, including bonds and equities. They work alongside our in-house economics team who focus on assessing the underlying macroeconomic environment. Our economists then work with our team of strategists and portfolio managers to translate their views into what this means at a portfolio level.
Avoiding financial crises is critical when investing in emerging markets. That’s why we developed the Country Risk Model, a general health check that helps us steer clear of economies with too many imbalances and symptoms of overheating. The model provides valuable trading signals outside full-blown crises too.