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Animal Spirits Podcast

Talk Your Book: Betting on Duration

Nov 6, 2023
Alex Morris, Co-Founder and CIO of the US Benchmark Series, joins the hosts to discuss making bets on duration, risks on the treasury curve, finding asymmetries in fixed income, and more! They explore trading strategies, bond purchases vs ETFs, impact of interest rate changes on bond prices and yields, buyers of institutional debt, and consensus on rates.
33:26

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Investors need to define their objectives and consider factors like inflation, recession, and safety when deciding how much duration or yield to target in fixed income investing.
  • The recent changes in the yield curve, particularly its inversion and subsequent steepening, indicate a more realistic and reasonable long-term expectation for US growth, presenting opportunities for successful fixed income strategies.

Deep dives

Importance of Yield in Bond Investing

In the podcast, the hosts discuss the shifting focus of investors from high-risk investments to bonds and the importance of yield in bond investing. They note that historically, investors did not have to think much about bonds as yields were falling and any investment in fixed income did well. However, with rates rising and the yield curve changing, people are now forced to think more critically about bonds. The hosts emphasize that there are many ways to successfully approach fixed income investing, and investors need to define their objectives and consider factors like inflation, recession, and safety when deciding how much duration or yield to target.

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