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Are long-duration Treasuries the best equity hedge?
Sunder Ramkumar
Quantitative Analyst
Andrew Bates
Multi-Asset Strategist

 


Yield curve dynamics have not always been easy to predict during episodes of stock market stress in recent years. A Capital Group quantitative analyst, Sunder Ramkumar, and multi-asset strategist, Andrew Bates, studied the link between bond maturity and equity diversification in developed economies during the last six decades ending in 2019.

Key takeaways:

  • Yield curve dynamics don’t always follow the same pattern during periods of stock market stress.
     
  • Long-maturity bonds have offered investors mixed incremental diversification benefits.
     
  • Duration management should be an active investment discipline for investors.

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Sunder Ramkumar is a quantitative analyst with 19 years of industry experience (as of 12/31/2022). He holds a master’s degree in management science and engineering from Stanford University.

Andrew Bates is a multi-asset strategist with 15 years of industry experience (as of 12/31/2022). He holds an MBA from the University of California, Berkeley Haas School of Business.

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