Fernando Luque, Editor of Morningstar.es, the Spanish sister site of Morningstar.co.uk, talks to Markus Krygier, Deputy Chief Investment Officer at Amundi, about investing in bond funds in a very low interest rate environment. Krygier highlights the need for exposure to bonds in a balanced asset allocation portfolio, as well as Amundi's belief that the interest rate cycle has passed its trough but rates will not increase substantially from here. Krygier adds that it's important to distinguish between the inflationary environment in the emerging markets and the developed world--there are notable risks in the former but the pressure are benign in the latter. As the global recoevery picks up steam, Amundi is looking to position its bond fund portfolios to pick up risk, with exposure to
credit markets, betting on the flattening of yield curves in developed markets, and a substantial play on currencies. "Global fixed income means bonds and currencies," Krygier tells Luque, adding that currency provides plenty of opportunities to play the macro themes that have been emerging over last few years.
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