David joined Canada Life Investments in 2006 as a credit analyst and was promoted to fund manager in October 2009. David's previous investment roles include working as an investment analyst at AGF Private Equity in Paris and as a credit analyst at Fortis Bank.
We have been doing portfolio trading a lot more since March and that’s because it reduces the size of the outright risk associated with a one-way trade on a single bond.
A decade of intense monetary easing has redirected investors in their frantic search for yield towards less liquid assets or lower rated bonds and this is precisely what has precipitated the fast deterioration in financial conditions.
Following the unprecedented falls across all financial markets in recent weeks, the safest government bond markets have had to become cash vaults for fund allocators trying to raise the liquidity needed to plug the fast-growing holes left by the equity, corporate bond and commodity sell-offs.
Expectations of a borrowing deluge from corporates globally are turning bond market attention to a little-known tool that's already helping smooth trading of illiquid debt the way exchange-traded funds (ETFs) did years ago.
The fixed income market certainly got a robust injection of capital via the central bank purchases in conjunction with investors looking for safe havens amid the pandemic.