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Sovereign bond returns

Posted: Sat Feb 09, 2019 1:39 pm
by SlowMovingInvestor
Article on sovereign bonds over the last 200 years.

https://www.bloomberg.com/opinion/artic ... nd=premium

Perhaps the key finding is .. the more defaults a country has suffered, the better total returns investors have enjoyed.
..the bonds of “serial defaulters” have succeeded in paying more than U.S. Treasuries or U.K. gilts,
..
Judged as an asset class, this adds up to the remarkable finding that external government bonds have managed to perform almost as well for investors as equities of U.S. companies, and better than other significant asset classes.


The big counterexample cited is Russia after 1917 :)

I do hold a little EMB and it has generally done reasonably.

Re: Sovereign bond returns

Posted: Sun Feb 10, 2019 5:53 am
by CarpeDiem22
It would be logical to think that if a country is prone to sovereign defaults, it has to pay higher interest to attract investors. Not surprising I'd say.

Re: Sovereign bond returns

Posted: Sun Feb 10, 2019 9:37 am
by Valuethinker
CarpeDiem22 wrote:
Sun Feb 10, 2019 5:53 am
It would be logical to think that if a country is prone to sovereign defaults, it has to pay higher interest to attract investors. Not surprising I'd say.
perhaps risky sovereign debt has a correlation with equity risk?