Allianz GI's Riddell: Why I am favouring EMD and shunning gilts

Also cautious on high-yield and IG credit sectors

clock • 3 min read

Holding a 20% weighting in unhedged local currency emerging market debt and moving underweight UK government bonds is how Allianz Global Investors' Mike Riddell is increasing the defensiveness of his £2.4bn Allianz Strategic Bond fund, even though he admits this might seem "counter intuitive".

Riddell, who has worked alongside now-co-manager Kacper Brzezniak on the fund since 2016, said the latest risk rally has made him more cautious on the high-yield and investment-grade credit sectors as markets are "getting ahead of themselves" based on positive vaccine news. "Markets seem to feel as though we have come through the other side of Covid-19 and we are now immune to its economic ramifications. We are not," he said. "Central banks cannot cure the impact of Covid. Central banks are not buying high-yield credit in Europe - they are buying investment-grade credit - and that was...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Unit trusts/OEICs

Trustpilot