Global bond yields have risen sharply, with the 30-year U.S. Treasury yield reaching its highest level in nearly 19 years, which is exerting pressure on equity markets. Bryn Jones, head of fixed income at Rathbones, highlighted that the traditional 60-40 equities/bonds portfolio strategy is becoming less effective as both asset classes are experiencing declines simultaneously.
He emphasized the importance of being opportunistic in the current market, quoting Warren Buffett's advice to 'be greedy when everyone's being fearful.' Gareth Nicholson, CIO of FAB Asset Management, is considering investments in 30-year Japanese bonds, noting that they present a compelling opportunity.
He also expressed interest in the shorter end of the U.S. yield curve, particularly the three-to-seven-year duration segment, as bonds are starting to offer better value compared to equities.
Meanwhile, Winnie Wu, head of APAC equity strategy at BofA Global Research, pointed out that despite capital outflows from China, the country remains well-positioned for investment, especially in semiconductor and hardware stocks, which are diverging from other sectors.
She noted that foreign investors often overlook promising Asian companies due to impatience, particularly those involved in AI and semiconductors that are affected by U.S. sanctions