Guinness Global Investors bets on bond market repricing

The fund, which debuted in July, targets developed markets including the US, UK, Germany, and Japan, where government yields have climbed significantly. Veysey argues that recent energy volatility and shifting growth risks have created a compelling entry point for active managers. By maintaining a focus on resilient income and selective credit, the strategy seeks to capitalize on bonds that are currently undervalued.

One specific example of this approach is the fund’s 4.3% allocation to Tesco debt. Veysey began building the position following the retailer's downgrade to high-yield status, betting on management’s commitment to deleveraging and an eventual return to investment-grade standing. This strategy mirrors a broader market sentiment where firms like Franklin Templeton are increasingly favoring bonds over equities for the first time in years. While concerns regarding fiscal health in France and Italy persist, analysts remain constructive on fundamentals, provided investors navigate the current volatility with precision.