27 Apr 2018
2018 has already seen substantial volatility both in markets and interest rate expectations.
The market rally led cyclicals was followed in February by a sell-off in the Technology sector and then a global correction. Equities fell, paradoxically in response to economic growth being stronger and therefore an increased likelihood of rising interest rates. Technology was especially impacted by market concerns about the higher cost of debt on a sector which traditionally has more leverage. While bond yields backed up, they still remain very low in historical terms, structurally fixed in terms of the income they are able to generate and investors globally continue to bemoan the absence of easily available, secure yet attractive yield.
The question then presents itself: is Income investing in Continental Europe about yield? The short answer is yes it can be, but no it’s not just about yield.