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Pressure mounts on investment-grade bonds as a growing number of investors feel they are headed for a collapse.

Their current high valuations and the risk of Fed’s ultra-low interest rates pushing the U.S. Treasury yields higher are two of many factors responsible for fanning the negative sentiment, says report in the Financial Times.

Because bond prices and yields move in opposite directions, the current low-interest rate environment has left bonds “vulnerable to selling.” New issues, on the other hand, come with “record-low fixed coupons and yields,” and are struggling to find favour with investors wary of the negative impact on the bonds of an upswing in global economy and higher stock prices.

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High-yield assets dwindle as bonds boom

Originally published on Advisor.ca