In 2019, Michele rode the bull run in US bonds, predicting that yields were “headed to zero” when the 10-year benchmark was trading at 2%. But his longer-term track record is encouraging, with the fund outperforming 95% of its peers over the past three years and 97% in five years.
Michele’s JPMorgan Global Bond Opportunities Fund gained 2% this year, lagging almost 70% of its peers, according to data compiled by Bloomberg. That sent Treasury yields to the highest levels since the global financial crisis, bruising investors like himself. Michele’s bullish view was repeatedly tested by markets in the past months, as stronger US economic data led investors to bet the Federal Reserve would continue to raise rates through the end of the year and keep them higher for longer. His long duration position is now the biggest since the start of the pandemic. “The considerable central bank tightening is starting to bite hard in the real economy.” We are buying every backup in yields,” said Michele. “More and more indicators are at levels you only see in recession. Michele, who has been in the market for more than four decades, says the deeply inverted US yield curve spells trouble and the Fed will be forced to cut rates by the end of this year. So when he saw inflation in the world’s biggest economy cooled more than economists had forecast, he was convinced this was the start of a prolonged rally. He has long believed the US economy will enter a recession as the Federal Reserve went too far in raising interest rates. Morgan Asset Management chief investment officer for fixed income has been gearing up for a bond rally since late last year, buying high-quality government bonds, credit and emerging-market debt as they fell to multi-year lows. (Bloomberg) - The bond rally that erupted after this week’s US inflation report was the moment Wall Street veteran Bob Michele has been waiting for.
0 kommentar(er)
