Big Funds Bet the ‘Anything But Bonds’ Trade Is Poised to End
- Largest 20 fund managers increased duration in past two months
- Risk-on returns as markets price in two rate cuts this year
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Big US bond investors have been aggressively shifting money into long-dated notes, betting that the unloved asset class will be one of the winners from eventual interest rate cuts.
The largest 20 mutual fund managers in the US have increased duration over the past two months as yields climbed, according to research by JPMorgan Chase & Co. Investors have been building positions by “piling into” high-grade corporate bonds to avoid the negative carry of government debt, said Nikolaos Panigirtzoglou, a global market strategist at the lender.