In the most recent quarter, investors withdrew US$6.67 billion from the iShares UK Gilts All Stocks Index (UK) D Acc, US$2.16 billion from the ILF GBP Liquidity Plus Class 2 fund, and US$993 million from the Vanguard U.K. Short Term Investment Grade Bond Index GBP Acc fund.
Bonds, according to some fund managers, now look appealing following this year’s downturn. This year alone, the ICE BoFA U.S. Treasury Index has decreased by 13.5%, while the Bloomberg Global Aggregate Bond Index has decreased by roughly 20%.
Read more: An ‘exceptional environment’ for fixed income investors going forward
According to Jake Remley, portfolio manager at Income Research + Management, “the yield cushion now protects the investor against negative total returns substantially more than it did at the beginning of the year.”
“However, it’s important to note that there will likely be further credit stress in many corners of the bond market and risk management is paramount in these uncertain times.”
