Ditching US investment grade corporate bonds in favor of USTs

Genevieve Signoret

Letter from the President

In client and model portfolios[1], we are selling U.S. investment grade corporate bonds (average duration: 5–10 years) and using the proceeds to buy U.S. Treasury bonds (average duration: 7–10 years). We explain why we’re making this move in this week’s edition of La Carpeta Negra Fixed Income: “What are we doing about bond markets liquidity risk?”

In our medium- and long-term portfolios, this transaction doubles our holdings of Treasury bonds and eliminates all exposure to corporate bonds except for a small position in convertible bonds in our medium-term portfolio.

[1] Read descriptions of these portfolios here. Clients receive details on their composition in addition to individualized strategies and portfolio management services. To request more information, please write to patrimonial@transeconomics.com.