What’s the best way to take advantage of the multi-year sell-off in bonds? It’s never happened before: bonds are about to deliver a third year of negative returns. The BofA Merrill Lynch 10+ Year Treasury Total Return Index in the US was recently more than 40 per cent off its highs – more than double its previous worst drawdown.
It’s left many shell-shocked investors wondering how what’s supposed to be the defensive part of a portfolio could perform so badly – and other investors wondering if there are bargains to be had.
