Fisher Investments, a firm managing approximately $336 billion, has been building a position in long-dated US Treasurys, despite most of Wall Street avoiding them. The firm, led by billionaire Ken Fisher, has historically focused on equities but is now incorporating a bond ETF sleeve into its portfolio. According to the firm's public commentary, the current yield environment is driven by sentiment rather than deteriorating economic fundamentals. Fisher's team believes the market is overreacting to fiscal concerns and duration risk, and that long-term yields are reverting to historical norms after a decade of low rates.
Bond Market Context
Long-duration Treasurys have staged significant rallies in the past when yields were high, rewarding investors who bought when sentiment was negative. The income component of long bonds is attractive, with a 5% coupon on a US government obligation locked in for three decades.
Investment Implications
Individual investors may consider the implicit message from Fisher Investments' allocation call. A $336 billion manager investing in long-duration Treasurys at these yield levels is notable, although the exact allocation amount has not been confirmed.
