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Duration proves sound bet for bond managers

Managers looked to bets on currency and the reaction of bonds to interest rate changes to generate returns last year, as a strong euro and flattening yield curve posed investment difficulties for credit specialists.

Randal Goldsmith, an analyst at credit agency Standard and Poor's said the timing as well as direction of duration positioning, in which investors bet on the sensitivity of bond values relative to changes in interest rates, was important. He said managers encountered varying degrees of success.

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