Salient to Investors:
- Jonathan Mackay at Morgan Stanley Wealth Management said investment-grade bonds will post annual returns of 1% to 2% for the next 7 years versus 8.7% average annual gains in the 30 years through 2012 – Fed stimulus is supporting bond values but lowering portfolio returns.
- Michael Hartnett at Bank of America said 45% of government bonds yield less than 1%.
- Investors have fled into junk-rated debt, equities, real estate and private equity.
- The speculative-grade default rate is less than half its long-term average.
Read the full article at http://www.bloomberg.com/news/2014-09-03/morgan-stanley-brace-for-seven-years-of-bond-losses.html
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