$470B Money Manager: Take Corporate Debt Over Treasuries
Forget about treasuries and focus your investment on corporate debt, says global asset manager Columbia Threadneedle Investments. Colin Lundgren is the head of fixed income in Minneapolis at Columbia, which manages around $470B in assets.
He points to wide spreads between yields on US government bonds and their investment-grade corporate counterparts, noting the gap has reached its widest since February 2012, Bloomberg reports.
In addition, US yields are sluggish in the face of a cautious Fed and signs of global economic weakness, which drives investors into government bonds.
That could change soon—Lundgren expects Treasury yields to rise more than corporates once the Fed looks to raise interest rates. [Bloomberg]