A strong meeting in the business markets triggered by the overflow of the central bank’s stimulus is disrupting the former bond investor. Dan Fuss, who warn investors to take risks they have seen over the past six decades.
Central banks last year significantly reduced interest rates and yielded more bond buying programs in order to reduce the economic impact of the epidemic, to a lesser extent it has worked to address the economic crisis.
Encouragement has helped to create wonder market return, raising stocks to record ups and downs to help secure government bond yields in the near future period. But the lender is insisting on a mortgage that is low but low, risky and now bad and dangerous. financial managers as Fuss, vice-chairman of the $ 353bn real estate Loomis Sayles.
“It scares me when I see what is left to the intellect and the environment,” Fuss told FT. “We will have to wait and see how things turn out, but delivering the harvest has been a daunting task.”
Fuss started his work in economics in 1958, when he left the US Navy to work for a bank in Wisconsin. After overseeing Yale University operations he joined Loomis Sayles in 1976 and managed one of its leading institutions until he stopped overseeing day-to-day operations earlier this year, at the age of 87.
During this time Fuss received numerous awards, including mention in the Fixed Income Analyst Society’s Hall of Fame in 2000, and won the annual Morningstar’s Outstanding Portfolio Manager Award recently in 2019.
Yet the increase that has taken place here has been a major milestone in his career, surpassing even the prevailing economic crisis, according to the former bond market. “I have hope, but you have to keep your thoughts about yourself. The bond market is not as safe and secure as before,” Fuss said. “There are dangers everywhere.”
Fuss’ comments were echoed by Goldman Sachs CEO David Solomon earlier this week, a former junk bond banker who also warned that markets are in danger of falling backwards.
“When I go back and think about my 40-year career, there have been times when greed has surpassed fear – we are in that moment,” he said. Solomon told Bloomberg at a conference in Singapore. “My experience says that the seasons will not last long. Something will change and bring more ideas.”
Fuss doubted that the Federal Reserve would be able to raise interest rates in the coming years – despite perhaps a “1950s” “rise” in inflation – so Loomis Sayles chief executive said he was concerned abundant bond market, often called junk bonds.
Yields over US yields rose to 11 percent in March 2020, but fell by 4 percent in early spring. Despite the bond market turmoil caused by rising inflation, junk bonds are still yielding 4.4% yield.
While this is relatively clear compared to the 2.3 percent offered by US securities corporate bonds – as well as yields of 1.6 percent 10-year Treasury note – it is still about half of the shares seen at peak in 2007. debt growth. Debt yield for the worst corporate debt that voted for CCC, the lowest without a repayment, has dropped from 2020 to 20 percent to 7.8 percent.
“Portfolio managers who look at the market are not a bad people, they know the risks. But if you run a high-yield fund and go back to the Treasury then you are not doing well, ”said Fuss.
Email: robin.wigglesworth@ft.com
Twitter: @robinwigg
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