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A key measure of risk-reward in financial markets has done something not seen since the financial crisis.
Sharpe ratios, which track the return of an asset compared to their level of risk, favour US bonds for the first time in a decade.
“For those James Bond fans among you, bonds are back,” John Bilton, JPMorgan Asset Management’s head of global multi-asset strategy, said this week.
Generally speaking, stocks return more per unit of risk than bonds, but that is no longer the case.

A tool used by financial market investors to evaluate the return of an asset compared to their level of risk has flipped “conclusively” in favour of bonds for the first time since the financial crisis.

That shift presents portfolio managers with a unique opportunity, according to senior staff at the $1.7 trillion asset management arm of JPMorgan.

Generally speaking, stocks return more per unit of risk than bonds, but in recent months that dynamic has reversed, strategists John Bilton and Karen Ward told journalists at the launch of the firm’s annual Long-Term Capital Market Assumptions guide this week.

“For those James Bond fans among you, bonds are back,” Bilton, head of global multi-asset strategy, said at the event, held in the firm’s London …read more


Source:: Businessinsider – Finance

      

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