Macquarie tells clients: don't abandon bonds completely

Livewire News


Macquarie tells clients: don't abandon bonds completely. Defensive assets such as bonds are an essential component of portfolios. Why? 1) Defensive assets provide diversification benefits as they are not correlated to equity markets, this is important during a cyclical downturn or a recession as portfolios gain protection and increase the ability to generate positive returns. 2) It is unlikely that most investors will be able to time their exit from growth assets as equity market falls often happen quickly and with limited warning, as happened in 2008. 3) In the current environment we believe the yield curve is already relatively steep, indicating the market is already pricing in future rate hikes and that structural themes, such as high levels of government debt and aging populations, are likely to contain major bond sell offs. We consider there to be strong diversification benefits of bonds in portfolios. Read the note: (VIEW LINK)

1 topic

Livewire News
Livewire News

Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.


No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Sign In or Join Free to comment