Strategy and Activity

The prospect of higher interest rates make for many bond market investors, though representing a challenge, but our strategy is shielded from rising returns - with an average duration of less than half of the relevant benchmark, no exposure to U.S. Treasuries and Japanese government bonds and minimum positions in European government bonds at the end of June. Moreover, we assume that there are opportunities, could beat from rising yields in the U.S. capital, by bringing us to the U.S. dollar against the Japanese yen in long position - a strategy that we believe a rise in could benefit from interest rate differentials between the U.S. and Japan.

Actively managed global bond investments can we believe in an environment of rising interest rates environment also provide opportunities to achieve relatively high returns, without taking in our opinion high Durations or credit risks. We continue to favor bonds with short maturities from countries such as Australia, Israel and South Korea. Bonds get there with a duration of less than two years and we believe have a high credit currently returns of between 3% and 5%.

It even though the spreads of emerging market sovereign bonds are from crisis levels dropped back, we discover in this sector is still value because the marked by slower growth environment in some countries with sound credit fundamentals, which have, for years and not bonds, caused financial needs.