Why has MM’s view toward GGOV changed?

Hi Darren,

The tweak to our view is around duration and what we now expect in terms of recessionary risks. When we had a more positive view on GGOV, we were more bearish on long term interest rates, and therefore more bullish on long term bond prices. We are now seeing a lower probability of a US recession than we did before. In that scenario, longer term bonds yields will not fall as much, and therefore bond prices will not rise as much.

Secondly, as we saw on Thursday night the large amount of new issuance (new debt being raised) looks set to keep bond yields higher than they otherwise would. Distilling all this down, it has prompted a step back from an outright bullish view on longer dated bonds (bearish on yields) i.e. we believe there is better places for our $$ even though we do still believe that rates have peaked, and bond yields have peaked, particularly at the shorter end of the curve.  Hope that makes sense and clarifies our view.

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BetaShares Treasury Bond +20-year ETF (GGOV)

LAST UPDATED 11/08/2023 12:49

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chart

BetaShares Treasury Bond +20-year ETF (GGOV)

LAST UPDATED 11/08/2023 12:49