Latest Blog: Stop the Game! - 01/31/2021
-
-
CIO INSIGHTS
-
CIO INSIGHTS
-
BACK TO CIO INSIGHTS
BACK TO ARTICLES & INSIGHTS HOME
-
-
-
-
Investment Insights are written by Angeles' CIO Michael Rosen
Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, trader and academic.
UNDER MY THUMB
Published: 11-20-2015As Mick Jagger sang (screeched?) 50 years ago. The song was about turning the tables on a domineering woman (The girl who once had me down).
A bit sexist, to be sure, but the song came to mind when looking at this week’s government bond auctions around the world (isn’t my life fascinating?). Our clients have been complaining about the low yields they are earning (as if I controlled that), and my response has been: count your blessings. You can lend the US government money for a year and earn half of a percent (50 cents per $100), or extend the loan for 2 years and earn almost 1% (91 cents per $100 to be precise). That’s infinitely more than almost anywhere else in the developed world.
In Europe, all short-term government debt (except Greece and Portugal) carry negative yields. Two-year German bunds yield -0.38%, a bargain to Sweden’s -0.47% and Denmark’s -0.70%. Even Portugal (!?) sold 1-year bonds this week with negative yields. Yields in Europe have been negative for the past year, and are getting more so (Chart below). So while the yields are negative, prices have risen steadily, making those investors seem pretty smart (so far).
Most extreme is Switzerland (of course). Mattresses are (apparently) in short supply in Switzerland (so what do people sleep on?), because rather than sticking cash under a mattress, ensuring you’ll get the same amount when you want to spent it later, investors are pleading with the Swiss Central Bank to lend it money for the next decade with the promise of returning a little less of it (see below—positive yields in Switzerland are found only beyond 20 years).
Why this is, is a deeper question. I’ve talked about this in my quarterlies, and it looks like it’s a topic we’ll have to come back to. For now, we’re all under the thumb of central banks, who have us, and are keeping us, down.
PRINT THIS ARTICLERELATED ARTICLES
-
Give Us Your Poor 09-16-2016
A large percentage of energy expended at Angeles is in evaluating, analyzing and judging investment managers. It is a ...
READ MORE -
Janet Yellen Is Your Friend 09-28-2016
I have not met Janet Yellen, but she seems like a perfectly friendly person. Yet, for some reason, investors seem to ...
READ MORE -
What I Learned While Atoning 10-17-2016
Twenty-four hours without food or drink is supposed to help focus the mind on the task at hand: atoning for the sins of ...
READ MORE
-
-
We build portfolios of best-in-class investment managers across all asset classes. If you would like to be considered for our portfolios, please contact us using our manager inquiries form.
- MANAGER INQUIRIES
-
SUBSCRIBE TO ANGELES' INSIGHTS
Get the latest investment information and stay on top of market trends.
-
CONTACT US
SANTA MONICA
429 SANTA MONICA BLVD,
SUITE 650
SANTA MONICA, CA 90401
310.393.6300
GET DIRECTIONS -
NEW YORK
375 PARK AVENUE,
SUITE 2209
NEW YORK, NY 10152
212.451.9240
GET DIRECTIONS
- SEC/ADV: REQUEST
- © 2021 ANGELES INVESTMENT ADVISORS, LLC & ANGELES WEALTH MANAGEMENT, LLC
- TERMS | PRIVACY
-
COPYRIGHT © 2021
ANGELES INVESTMENT ADVISORS, LLC
ANGELES WEALTH MANAGEMENT, LLC
How Can We Help You?
Institutional InvestorsFully resourced investment office built to manage sophisticated client investment programs
Private WealthPersonalized discretionary portfolio and wealth management services powered by institutional process
Investment ManagementRigorous process and a flexible platform designed to meet client needs
Articles & InsightsLatest insights and perspectives from the Angeles team
Contact UsGet in touch