The Drag on Returns of Bonds

We don't think that owning those kinds of positions over a full market cycle is a cost effective way to allocate capital and fixed income. When you look at the composition of most bond benchmarks, they're actually pretty concentrated, not very well diversified. The US aggregate bond benchmark has more than 70% of its assets in treasuries and investment grade corporate bonds. You're not really tied to the real economy, to the fortunes of companies that are trying to make real goods and services.