Investors adopt longer-term approach to yields

The search for yield among investors continues. But, amid mounting fears of a double-dip, it is taking a new twist.

The main avenue for yield enhancement in recent years has been a switch into riskier assets – from junk bonds to asset-backed securities.

Now, with short-dated US government bond yields close to zero and some investors fearing another US recession, growing numbers are opting for government bonds with longer maturities instead of taking on credit risk.

Strategists are describing the moves as a “duration grab” – investors moving from low-yielding two-year or three-year government debt into seven-year notes, 10-year notes and even 30-year bonds.

Read Full Article from Financial Times

- Posted: 2011-08-24 14:42:01

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