How one portfolio manager plans to keep investors happy in the face of rising rates

SINGAPORE (Feb 24): The prospect of higher interest rates has bond market investors racing for the exits.

According to preliminary data from fund flow tracker EPFR Global, bond funds saw net outflows of US$16.9 billion ($24 billion) in 4Q2016. That was the biggest quarterly outflow since 4Q2015.

Bond yields have trended downwards for three decades, with the prices of bonds moving inversely higher and making bond investors rich. In September 1987, the yield on the US Generic Government 10 Year index was 9.6%. It is currently 2.4%. Now, there are concerns that the bond bull market has run its course.

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