Investors anticipate return to bond safe havens
Fund managers suggest sovereign debt may soon reclaim its role as a hedge against volatility if rising inflation begins to weigh on corporate earnings and economic expansion. While bonds have delivered negative returns during the recent conflict, high yields and potential energy shocks make fixed income increasingly attractive compared to expensive equity markets.
Xurve View
Insights:
Xurve View
Global investors moved $12B into developed-market government bond funds since the conflict began, despite 10-year United States Treasuries returning negative 1.5%. Sovereign debt has underperformed the S&P 500, which rose 9% over the same period. Fixed income may reclaim its safe-haven status if rising energy costs begin to erode global corporate growth.
