The nature of capital markets has changed dramatically in the last eight years, argues Richard Woolnough, manager of the M&G Optimal Income Fund.
Speaking to Brewin Dolphin’s Ben Gutteridge, Woolnough said that while there is definitely less liquidity available than there was in 2006 and 2007, he does not agree that there is less than there was in the depths of the financial crisis.
“Some of the measures of liquidity being put forward to show the collapse in liquidity show the market is less liquid than in 2009, that is plainly, observationally wrong,” he said.
However, he said, there has definitely been a change in the nature of the market, explaining that the fixed income market has gone from being driven by large investment banks with agressive managements and freely available capital to a far more traditional market where instruments are traded from one investor to another.
“It is what the regulator wanted and it makes for a more stable market,” he said.
