Long-term bond investor Chris Iggo sent a farewell message to the market when he retired: after four difficult years, the bond market will rebound. “In my opinion, despite general market concerns about issues such as inflation, government borrowing, private equity credit, and a surge in corporate borrowing, the appeal of bonds has reached its highest level in years,” he wrote in a report on September 25. “It is probably more appropriate to issue a warning about a fixed income disaster in 2022 than 2026.” Iggo made a bullish prediction at a time when global bond markets are experiencing severe turmoil. Since this year, fixed income assets have fallen sharply due to the Iran war driving up oil prices and increasing inflationary pressure. Meanwhile, widening government deficits and heavy debt burdens are forcing investors to demand higher yields before they are willing to hold sovereign debt. In recent weeks, bond yields in the US, Japan, and the UK have climbed to multi-year highs. Investors are debating whether these bonds currently have investment value or are at risk of further decline in the face of unresolved inflation and fiscal risks. “As a veteran of the bond market, I think the return on fixed income assets in the coming year is likely to be quite impressive,” he said. “Long-term bonds have experienced a four-year bear market. Term premiums have gone up. Now is definitely the time for improved returns.”

Long-term bond investor Chris Iggo sent a farewell message to the market when he retired: after four difficult years, the bond market will rebound. “In my opinion, despite general market concerns about issues such as inflation, government borrowing, private equity credit, and a surge in corporate borrowing, the appeal of bonds has reached its highest level in years,” he wrote in a report on September 25. “It is probably more appropriate to issue a warning about a fixed income disaster in 2022 than 2026.” Iggo made a bullish prediction at a time when global bond markets are experiencing severe turmoil. Since this year, fixed income assets have fallen sharply due to the Iran war driving up oil prices and increasing inflationary pressure. Meanwhile, widening government deficits and heavy debt burdens are forcing investors to demand higher yields before they are willing to hold sovereign debt. In recent weeks, bond yields in the US, Japan, and the UK have climbed to multi-year highs. Investors are debating whether these bonds currently have investment value or are at risk of further decline in the face of unresolved inflation and fiscal risks. “As a veteran of the bond market, I think the return on fixed income assets in the coming year is likely to be quite impressive,” he said. “Long-term bonds have experienced a four-year bear market. Term premiums have gone up. Now is definitely the time for improved returns.”