Please see below an article from Legal & General Investment Managers Asset Allocation team, which was published late yesterday afternoon and details a variety of views on Bond Yield movements and their potential impact on markets:
As you can see from the above article, there are various factors to be considered when trying to assess how Bond Yield movements will impact on markets. I believe LGIM are saying that short-term bond yield increases may be unwanted, and there are fiscal tools (i.e. Quantative Easing) to help dampen demand and keep rates lower. Also, any potential equity sell-off which has stemmed from rate increases could be seen as a buying opportunity.
Other fund manager views could differ from the above.
I think the key message regardless, is to keep calm and remain invested for the long-term, markets will recover from short-term dips.
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Please keep safe and healthy.
Carl Mitchell – Dip PFS
IFA and Paraplanner