M&G’s Carlo Putti explains the importance of liquidity – the ability to sell assets at a reasonable market level – in a portfolio of fixed income assets.
Carlo discusses some key points to consider when constructing a portfolio:
• Keep a proportion in highly liquid assets
• Consider buying new issues
• Diversify risk by geography, sector and individual issuer
• Be cautious of very small issues
• Analyse whether you are being properly compensated for any illiquidity premium
