Liquidity boost hinders fixed income engagements

The low interest environment has made it difficult for bondholders to engage with corporate issuers as refinancing remains cheap.

Sparinvest's senior portfolio manager Thomas Bjørn Jensen and analyst Antonia Draghici. | Photo: PR

Central banks across the world have filled the financial system with fiat liquidity largely by vacuuming the market for sovereign and corporate bonds to spur growth after financial crisis of 2008 – known as Quantitative Easing (QE)

As a consequence of QE, it has become increasingly difficult for bondholding asset managers to have meaningful engagement with portfolio companies, Sparinvest Senior Portfolio Manager Thomas Bjørn Jensen notes.

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