Brexit triggers flight to safety in government bonds, TD manager says

Robert Pemberton expects interest rates to stay low.

Sonita Horvitch 6 July, 2016 | 5:00PM

Robert Pemberton, managing director and head of fixed income at TD Asset Management, says that the unexpected result of the United Kingdom's referendum on its membership in the European Union has triggered a flight to quality in the global bond market.

"The June 23 vote by Britain (known as Brexit) to leave the European Union," says Pemberton, "has substantially increased the already high percentage of sovereign bonds in the developed world that have negative nominal yields, indicating the extent of the flow of funds into this market."

Before this vote, US$8.2 trillion in developed-world sovereign bonds, representing 32% of this total market, had negative nominal yields, Pemberton says. "Over the first two days following the Brexit vote, that number swelled to US$9.4 trillion, or 38% of the global sovereign-debt market."

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

About Author

Sonita Horvitch

Sonita Horvitch  

© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies