After a decade of bond prices being high and yields at record lows, 2022 has seen prices fall, and is prompting many to reconsider their allocations.
But, despite the higher yields, the present very high levels of inflation mean many bonds on the market continue to provide an income which is below the rate of inflation.
One of the challenges with owning government bonds in recent times has been the lack of diversification benefits, as that asset class rose, and then fell, in line with equities.
But with recession risks at elevated levels, it may soon be the case that the inverse correlation between government bonds and equities is restored, creating a different set of reasons to potentially own the asset class.
So is now the time to own more government bonds?
You can have your say by voting in our Vanguard Vantage Point poll, the link for which is above.
david.thorpe@ft.com
