Japan has the best environment for fixed income assets and is 10 years ahead of many Western economies, says Nick Gartside, fund manager of the JPM Strategic Bond fund at JP Morgan Asset Management.

Gartside said along with opportunities in Japan he is looking towards Australian government bonds, local emerging market debt - particularly in Mexico and Indonesia  - and in selective US non-agency mortgages.

“While anaemic recovery looks likely to continue, the environment is strong for fixed income, especially as we know cash rates won’t move for a couple of years. Those that succeed will be nimble bond managers with interests in high yields, and I suspect investors will be surprised at the returns they can achieve,” he said.

In the UK market, debt and growth are major issues, and since 2005 debt has ballooned; Gartside said there is still a long way to go in tackling underlying economic issues.