There are signs that inflation has peaked and is due to come off in the next few quarters.

That would invariably take us to a position, maybe in Q2 2023, where it looks quite compelling for us to own bonds, says Oliver Ge, an assistant portfolio manager with Pendal's Income and Fixed Interest team.

"At that point you’d already see inflation pressures come off and growth indicators start to materially deteriorate.

"Then central banks will in all likelihood tilt their reaction function to be more benign, more dovish. They're not accelerating, there likely won't be more hikes.

"That environment is conducive to owning bonds. You're looking at returns of five to 6% per annum at that point."

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