Some global bond investors are shifting toward markets like Australia and Europe as doubts grow over the Federal Reserve's ability to control inflation, adding to pressure on Treasuries. Schroders Plc, which oversees $1.1 trillion, is increasing bearish Treasury positions and buying front-end government bonds in Australia, the UK and the eurozone, betting those front-end yields will fall while shorting US five- and ten-year notes. Gama Asset Management's Rajeev De Mello is adding positions in Australia, South Korea, Singapore and Norwegian bonds while trimming longer-dated US Treasuries. BlackRock's Navin Saigal said the Fed's willingness to let markets do more heavy lifting means investors are not compensated enough for large directional rate bets and should focus on income and diversification, noting Chinese government bonds can act as a defensive anchor. Aberdeen Group's Jerome Tay added that falling correlations with US rates offer better diversification and that elevated inflation uncertainty and reduced Fed clarity make Treasury investing more challenging than in previous cycles.
Schroders PLCSchroders is actively increasing bearish Treasury positions and buying front-end bonds in Australia, UK, eurozone, betting on falling yields, which could benefit its funds.
Abrdn PLC
BlackRock IncBlackRock's Navin Saigal comments on Fed policy and diversification, but no direct impact on BlackRock's business.