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No Longer Superheroes? The Twilight of Bonds

Challenging Core Asset Allocation Assumptions

Nicolas Rabener
10 min read
22 Jun 2020

SUMMARY

  • Bonds had superhero qualities over the last few decades
  • The case for bonds in asset allocation is not clear when yields are low or negative
  • Japan can be used as a roadmap for the outlook of a 60/40 portfolio in the US or Europe

FIXED INCOME KRYPTONITE

“Faster than a speeding bullet. More powerful than a locomotive. Able to leap tall buildings in a single bound.”

And he can fly and shoot lasers from his eyes. Superman not only has the best superpowers, but he is also handsome, charming, and humble. Plus he dearly loves his mom and farm. He might come off a little boring and straitlaced compared to more colorful characters like Ironman or Thor, but he’s clearly the superhero who wins over the most hearts.

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