Deep Dive: Bond managers must 'unlearn' the past decade of central bank lessons

Speaking to Investment Week, Adrien Pichoud, chief economist and senior portfolio manager at Bank Syz, explained that a decade of ‘ZIRP', or zero interest rate policy, had forced investors to extend maturities, or climb down the credit rating scale in order to secure positive yields. However, with a return to interest rates levels not seen since 2008, resulting in cash rates between 4% and 5% across USD, GBP and EUR, credit and duration risk were "no longer unescapable", he said, and had instead become "directional options" as "risk-free money market instruments" offer such yield. Bro...