"Now, the carry is helping to offset the price declines. If there were future price declines, the carry would go higher and help to offset the price movements."
This is central to the principle that when bond prices rise, the yield falls, and vice versa.
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For Fairview Investing's co-founder Gavin Haynes, to do these kind of trades, one needs to use an active manager.
He says: "If carry is one's motive for bond investing, this is best achieved via active management in bond markets using strategic bond funds; absolute return bonds and select global bond funds provide the best options.
"Fund managers can use tools to exploit interest rate, credit and currency movements", he explains.
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