PWM travelled to Frankfurt to meet leading figures in the German asset management and private banking space and discuss the outlook for fixed income

Clients are responsive to the transformational effects global mega trends are likely to have, as well as their ability to boost returns and smooth volatility

Respondents to PWM’s fifth annual asset allocation survey recommend clients overweight equities and alternatives at the expense of bonds, but warn of increased volatility and the need for a long-term view

Concerns about whether bonds still provide protection against falling equities has prompted banks to look elsewhere for diversification

Fixed income has traditionally played an anchor role in both private and institutional portfolios, providing both yield and a counterbalance to equities. But right now traditional bonds are fulfilling neither of those roles, so it is time to replace them?

Unlike their counterparts in equities, bond managers can make money in both good times and bad, believes David Zahn, Franklin Templeton’s fixed income chief in Europe, but they need to be able to read people to really excel

Sanjay Joshi, London & Capital’s fixed income boss, is cautiously optimistic about the state of the global economy, but warns stability brings its own challenges

Those looking for yield from traditional fixed income will be disappointed, so many investors are delving deep into less well trodden parts of the bond markets