The Most Crowded Trade in Bonds Could Be Crumbling

Posted by Bloomberg

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  • -1x-1Global government debt due in decade or more swells by record
  • Duration buildup creates vulnerability to interest-rate shock

The hottest craze in fixed income is at risk of overheating.

A headlong rush into higher-yielding, long-term bonds in recent years has created one of the most crowded trades in financial markets. Investors seeking relief from central banks’ zero-interest-rate policies have poured into government debt due in a decade or more, swelling the amount worldwide by a record $733 billion this year. It’s more than doubled since 2009 to about $6 trillion, data compiled by Bloomberg and Bank of America Corp. show.

Now money managers overseeing more than $1 trillion say..…continue reading HERE


….related: Bank of America: Investors are getting worried that a bond market crash is coming