“We don’t think there will necessarily be a massive sell-off in bond markets, but reward for risk at these levels is lower than normal.”

Illustrating this view, none of ipac’s fixed income benchmarks now exceed 10 years. The global sovereign and corporate debt investments would now be benchmarked in 25 per cent splits to 0-3 year, 3-5 year, 5-7 year and 7-10 year indexes.

For its global sovereign exposures, ipac adopted GDP-weighted indexes from Barclays that were better aligned with issuers’ abilities to service and repay their debts, Murray said.

For global corporate credit mandates, ipac took interest rate risk out of the benchmark by developing a “mirror swap index” with Barclays, he said.