144. Why confusion over conviction will lead to bouts of volatility

Church House Tenax Absolute Return Strategies co-manager James Mahon tells us why low bond prices have caused more confusion than conviction in the market at the moment – and why he thinks it will result in numerous bouts of volatility. He also tells us why the global economy was not prepared for the bottleneck in demand for production and staff availability, resulting in higher than expected inflation figures. James also talks us through the use of floating rate notes as a way of protecting his fund and why the UK is set for a protracted recovery.
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Church House Tenax Absolute Return Strategies is a long only multi-asset fund, which invests directly in assets, rather than using the ‘fund of fund’ route. It targets positive returns over rolling 12-month periods. Managers James Mahon and Jeremy Wharton place a heavy emphasis on capital preservation and it is one of the few absolute return funds with a track record which goes back beyond 2008 and the global financial crisis.

Read more about Church House Tenax Absolute Return Strategies 

What’s covered in this podcast

  • Why bottlenecks around production and staff availability are causing higher than expected inflation figures – and why central banks believe it’s temporary [0:15]
  • The conundrum of long-term interest rates and why they don’t make much sense [4:11]
  • The US Federal Reserve’s challenging dual mandate [6:41]
  • What are the managers doing to protect their portfolio from longer-term interest rates [9:35]
  • The confusion in markets around low bond rates and why they will result in numerous bouts of volatility [10:15]
  • Why he believes the UK is on a protracted recovery curve [10:40]
  • The alarm bells that have put the managers off the majority of hedge funds at the moment [12:15]
  • The rationale for cutting back on their infrastructure exposure and the re-jig in property holdings [13:42]
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