Philippa Gee: The right managers can make bond holdings work for you


This won’t come as a shock to you, but there have been yet more deliberations in recent weeks about passive investments. I am not looking to get into a discussion of the relative merits of each side of the active and passive debate, but just to reflect on the current situation.  

With the bond market allegedly about to explode, it would make sense to me that a bond allocation (if relevant) might best be actively managed at this time.  

If you are assuming that the bond market is at least highly priced and going to face some challenges, then you might prefer to opt for a manager who has some dexterity to move from one holding to another, to diversify risk and to actively manage the assets in relation to what is happening as markets evolve?  

Its just that there have been a number of statements in recent weeks by various people suggesting that now might be a useful time to move your bond exposure into passive bond holdings. 

Really? Call me crazy, but I would suggest that this might be the wrong time to consider such a move and that active management could really win the day. Shaving zero point something off your fund charge could be little pain relief if the market does really react.

Philippa Gee is managing director at Philippa Gee Wealth Management