Dire Bond Returns Have 60/40 Managers Juicing Portfolios With FX
- Pictet’s rationale for currencies focus: ‘We made a fortune’
- Volumes suggest more debt investors are chasing allure of FX
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It was a dinner conversation with former Federal Reserve Chairman Ben Bernanke in early 2020 that convinced Cesar Perez Ruiz that the golden age of bond investing was over.
The rate on trillions of dollars in debt had sunk below zero, upending one of the pillars of international finance: that borrowers always pay interest. For Bernanke, it was a deflationary signal that could not be ignored. For Ruiz, chief investment officer at Pictet Wealth Management, it was a sign that he eventually may need to get out of bonds -- and instead turn to FX plays, like wagering on the euro or the yen.