Fixed income portfolios face difficult future

Investors could redeem large amounts from fixed income hedge funds soon after the recent bond market falls, both due to funds' performance being wiped out and a healthier economic outlook, according to fund managers.

David Smith, chief investment officer at GAM, said the recent sell-off and volatility could pose a serious longer-term risk to the industry. Some investors who viewed fixed income as a lower return, lower risk class could lose confidence in hedge funds, he said, especially if their m