Loomis Sayles’s Fuss Favoring Canadian, Australian and New Zealand Bonds
Dan Fuss, vice chairman of Loomis Sayles & Co. in Boston, comments on sovereign bonds.
Fuss, who is a member of the management team for the $21.1 billion Loomis Sayles Bond Fund (LSBDX), spoke yesterday with Kathleen Hays and Vonnie Quinn on “The Hays Advantage” program on Bloomberg Radio.
On sovereign bonds:
“We do own Canada. We own Australian and New Zealand. We don’t own U.S.”
“You’re looking at the currency, you’re looking at the ability to pay, both of which from our view are very, very, very strong. From a longer-term viewpoint, it gets even better.”
“Yields (USGG10YR) are ridiculous. You have people buying, specifically our own central bank, along with some of their friends offshore, and holding prices artificially high.
‘‘It is artificially supported by our own central bank and their friends offshore. They account for all -- and then some -- of the net new supply of Treasury notes and bonds.
‘‘You can hypothesize. What if they weren’t there? You’d have higher yields.’’
Ten-year Treasury yields were little changed at 1.95 percent as of 9:15 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The record low was 1.67 percent set Sept. 23.
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