Bond stars scrap shorts on treasuries as yields plunge

Old Mutual's Stewart Cowley and LGIM's Richard Hodges have reversed their short duration stances and removed their treasury short positions as the flight to safety pushes yields to record lows.

Cowley, who began shorting the US treasury market at the start of the year, has now moved long duration on G5 government bonds as he moves his £513m Global Strategic Bond fund to more of a “classic” exposure. “The world has changed a lot in the past six weeks and our thinking has had to change with it,” said Cowley. Legal & General’s Richard Hodges, meanwhile, has stopped out a short position in two-year treasuries within his £1.7bn Dynamic Bond Trust. The manager said there is little point maintaining the position at a time when two-year yields touched a record low of just 0.177% ...