Invesco manager: Time to tread cautiously in fixed income markets

"At this point in the cycle, active management is very important," says Jennifer Hartviksen.

Michael Ryval 8 November, 2018 | 6:00PM

As central banks continue to raise interest rates, they have created growing volatility and uncertainty in bond markets. Yet Jennifer Hartviksen, a fixed income specialist at Toronto-based Invesco Canada, maintains this is part of the process of normalization as years of sub-par interest rates are being reversed.

Moreover, because of the uncertainty surrounding the direction of major economies such as the United States, Hartviksen argues that it's vital to be cautious and take an active approach to dealing with conflicting forces swirling through bond markets.

"What's caused the return to volatility is the removal of what used to be called the 'Fed put.' That was what supported the market," says Hartviksen, Head of Canada Fixed Income and senior portfolio manager who is lead manager of the $135.3-million Invesco Active Multi-Sector Credit. "But we have seen the Federal Reserve stop its quantitative easing and raise interest rates. The uneasy feeling comes from the market acknowledging that the Fed's support is no longer there and that we are returning to a more normalized market environment where volatility is part of the equation."

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Cigna Corp163.15 USD-1.10
First Quantum Minerals Ltd12.87 CAD-3.45

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Michael Ryval

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