Didier Darcet
1 April 2021

Bonds. Which Bonds? Update.

One year ago, facing the largest bond bubble in history, Gavekal-IS published “Bonds. Which Bonds?” focusing on four investment alternatives to US fixed-rate treasury bonds to protect income portfolios:

  • US inflation-linked bonds.
  • Gold.
  • Unhedged fixed-rate bonds from commodity exporters, especially from Norway, Australia, Brazil, South Africa and Russia.
  • Unhedged Chinese fixed-rate bonds.

The four positions generated more than 20% alpha against US bonds, on average, which now raises the question of a possible over-extension of their outperformance.

Keep? Sell? Who knows?!