The global crisis is building in debt rapidly. After BOJ even the ECB came out and said it would stop its bond-buying program. Putin is selling off US debt very rapidly because of interest rates. The spin is always political, but the trend toward higher rates is the real driving force. China also a large holder of US treasury will have to start selling US treasuries as they go into current account deficit.
Rising US rates will also act as anchor to Global bonds.
In an upward cycle for interest rates, never lock & load – always stay nimble if you are the investor.The one thing you do not want to do is buy a long maturity paper . As rates go higher, you will be locked in and unable to take advantage of the rising rates. The safest thing would be to put money in overnight fund or commercial paper no more out than 90 days and keep the cash rolling in that area until we reach a point when the rates are peaking. Toward the end of cycle, is when you should look to add extremely long bonds.
On a risk adjusted basis liquid funds ( which invest in less than 90 days) have delivered the best returns over last 3 years
IF you want to play curve steepening then there is hardly any instrument in Indian Markets.More seasoned investors who want to play US strength and possible US curve steepening can do through
TBF -ETF
(The ProShares Short 20+ Year Treasury ETF provides daily inverse exposure to an index that tracks the performance of US Treasury securities with remaining maturities greater than 20 years.)
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