fixed income

The next ‘hidden liquidity problem’ that could erupt

The gating of Neil Woodford’s flagship Equity Income fund in early June has alarmed investors. However, Woodford invested the fund in small and unquoted stocks that are difficult to sell quickly, listing some stakes in unquoted companies in Guernsey simply to circumvent the regulator’s rule that caps at 10% of net asset value (NAV) the proportion of unlisted securities an open-ended fund with daily dealing can hold.

To buy or not to buy: are bonds more work for less return?

For an area that is supposed to be the stable asset, ballast for a portfolio, fixed income has looked pretty rocky in 2018. Ten-year gilt yields have been as low as 1.15% and as high as 1.7%. The corporate bond market has bounced around with increasing unpredictability. If investors needed reminding that this is a new environment for bonds after a lengthy bull run, the past 12 months have provided ample proof.