Last week bond yields globally dropped to the low end of recent ranges and reached new record low levels in Australia, Ardea discuss what investors should think about.
Conventional portfolio construction assumes that governments bonds will diversify equity risk. The theory is that when equities fall, bond yields decline, resulting in capital gains on bonds that help offset equity losses. The problem is that it’s not working that way in practice.
Gopi Karunakaran shares his thoughts on the global fall in interest rates over the past 10 years and what to expect when this tailwind to asset prices subsides.