4 ms·
I think pension funds are the bag holders here. They require 6% yield or so to function, and real yields are still negative or near zero. Yet their investment m
by dharma1 6y ago
I think pension funds are the bag holders here. They require 6% yield or so to function, and real yields are still negative or near zero. Yet their investment mandates often dictate they need to have bonds or a mix of equities and bonds.
- neilwilson 6y agoThey require a 6% yield to function over the long term. However you can solve that by transfer from the young - which is what we are seeing. Hence Compulsory Pension Contributions in certain jurisdictions. Which when you follow it through is just a privatised tax where some financial middlemen get to skim off the top.
- tomatocracy 6y agoLife insurers are the other big "forced" buyers of long bonds. Regulation tends to be stricter on them in terms of requiring a certain portfolio vs pension funds too.