Market notes: sell your bond proxies? No

“Should I sell my Unilever (Diageo, Heineken, Mondelez, Pepsi, RELX) shares when interest rates go up?” This is the question that has been asked many times over the last few years. If interest rates rise, as they look set to do, it makes sense that securities that look like bonds - famously utilities and tobacco companies - should be rerated in the same way that bonds are. Yields rising =prices falling.

Yet "bond proxies" is a broad definition, meaning different things to different people. Should the term include the big global brand companies so beloved of fund managers such as Nick Train and Terry Smith - both of whom feature prominently in the Investment Reader portfolio? Are not they bound to suffer if, as many now expect, bond yields are on a rising path?

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