Fund Management

Time to trim bond strategy

Peter Harrison, chief executive of RWC Partners, says in the current inflationary environment, trustees must urgently reassess the risky strategy of investing heavily in bonds. Inflation will undermine the capital value of the bonds and if they are holding corporate bonds, there is an additional risk of default. While the obvious thing to do in the past was to buy more index linked gilts, yields are now so low that it would be better to look at alternative investments.