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Aussie Long Bond May Gain 24% If $480 Billion Fund Is Right

  • Asset Management One says yield may fall one percentage point
  • Japanese investor says RBA probably hasn’t ended easing cycle
The Reserve Bank of Australia.
Photographer: Saeed Khan/AFP via Getty Images
Updated on

Australia’s new long bond could provide investors with a gain of more than 24 percent within its first six months if a prediction by Japan’s Asset Management One Co. proves correct.

The Tokyo-based firm, which oversees more than 50 trillion yen ($480 billion), bought the 30-year note at last week’s sale and reckons additional Reserve Bank of Australia easing could drive the yield down to 2.25 percent by the end of March, according to global fixed-income fund manager Akira Takei. Australia last week priced A$7.6 billion ($5.8 billion) of the securities to yield 3.27 percent in its biggest-ever single sale of sovereign debt.