South African Bonds Offer World-Beating Gains. Citadel Wants Out
- Debt has returned more than double next contender this quarter
- South African political risks and Fed hike could scupper party
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George Herman at Cape Town-based Citadel Investment Services is dumping the emerging world’s best-performing bonds.
South African government rand notes have earned 14.3 percent this quarter in dollar terms, the most out of 31 developing nations tracked by Bloomberg indexes and more than twice the return of second-placed South Korea. Yet Herman, 49, says the move has gone too far. He’s selling all his holdings in favor of shorter-dated securities.