Investors doubt fund manager ability to handle fixed income

Survey2Institutional investors have little confidence in their fixed income managers when it comes to dealing with the end of the credit cycle or coping with rising interest rates, a survey shows. Only 3% have complete confidence in their managers – while 6% have no confidence at all. The primary reason cited is that few managers have the experience of dealing with an environment like this, a survey by NN Investment Partners of 103 institutional investors finds. Just over half (52%) said some managers will struggle in a tightening market, though 29% thought managers would generally be fine. Many of the investors said fixed income managers would have to adopt a more flexible approach if they were to achieve a positive performance irrespective of the interest rate cycle. Sylvain de Ruijter, head of global fixed income at NN Investment Partners, says: “The current environment is very different from the last US tightening cycle, given the long period of very low interest rates and extensive quantitative easing that we have seen. A Fed tightening cycle, if it comes, may well be very different from earlier cycles, something that few fund managers have experienced.” ©2015 funds europe

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