2019 will see lower returns and greater volatility for fixed income investors, Steve Oh, the global head of credit and fixed income at PineBridge Investments, told CNBC Monday.
Oh told CNBC's "Squawk Box Europe" that investors should review their portfolios amid concern over higher rates globally and potential tightening from both the European Central Bank (ECB) and the Bank of Japan (BOJ) sometime in 2019 or 2020.
"Rate normalization in the U.S. has been the major theme across fixed income markets in 2018 ... Higher rates now may be ahead globally, as both the ECB and the BOJ appear poised to begin tightening sometime in 2019 or 2020, albeit at a very slow pace," he said in an accompanying research note earlier this month.
He added that volatility could also be caused by a rapidly expanding U.S. budget deficit which is predicted to materially exceed $1 trillion annually by 2020.
"The U.S. will need to increase debt issuance substantially, even as Treasury yields become less competitive and foreign demand shifts back to local markets," Oh added. A bond's yield has an inverse relationship to its price.
"The potential imbalance in supply-demand conditions could place upward pressure on yields in an environment of weakening economic conditions that is typically beneficial for bond investors."