In light of the current fiscal and monetary concerns that are gripping the minds of investors around the world, Institutional Asset Manager asked the heads of some of the world’s leading asset managers to share their thinking on portfolio management trends post-Lehman and beyond 2011 in concise fashion. Nick Gartside (pictured), International CIO for Fixed Income, JP Morgan Asset Management, responds:
"2009 to 2010 was about capturing the generational opportunity in fixed income credit; both investment grade and high yield bonds sold off to very attractive levels. Many institutional investors grabbed this opportunity.
"2011 has been characterised by an anaemic economic recovery. This trend is set to continue and will be fuelled by continued and prolonged debt deleveraging. With the absence of its traditional enemies: inflation and higher interest rates, fixed income is liable to perform well in this environment and returns are likely to positively surprise investors.
"The key question for investors is: what sort of fixed income? The days of having just a static allocation to government or corporate bonds are over. The challenge going forward will be to find managers that can dynamically allocate across the different fixed income sectors: government, corporate, emerging market, securitised and high yield."