Fisher Investments, a firm managing approximately $336 billion, is undertaking a contrarian strategy by accumulating long-dated US Treasurys. This move is considered bold by many given that 30-year yields have surpassed 5% for the first time since 2007. The firm believes the current high yields are driven more by sentiment and an overreaction to fiscal concerns rather than deteriorating economic fundamentals, anticipating a reversion to historical norms after a prolonged period of artificially low rates. While no direct confirmation of a specific $4 billion allocation has been made, the firm's pivot to include a bond ETF sleeve within its equity-focused portfolio is a notable development for a firm known for stock picking.
This contrarian stance echoes a previous instance in late 2023 when long-duration Treasurys rallied significantly after 10-year yields briefly touched 5%, rewarding investors who bought during peak negative sentiment. For individual investors, the current 5% coupon on a US government obligation locked in for three decades presents an attractive income opportunity that was rare between 2010 and 2023.
The broader bond market, however, is grappling with significant shifts. On September 15, 2026, the 10-year US Treasury yield surged to 5.02%, the highest level since 2007, driven by rising energy prices, mounting debt, and inflation. This increase was also influenced by growing risks to Middle East oil supplies. Man Group notes that 10-year US Treasury yields piercing 5% challenges the traditional notion of "risk-free" assets, with sticky inflation and high debt loads turning sovereign paper into a source of portfolio risk.
Jupiter Asset Management’s Mark Nash is another fund manager betting on a rebound in long-dated bonds, arguing that markets are overestimating sovereign debt risks. He favors "curve-flattener" trades, anticipating a decline in longer-dated bond yields, which contrasts with the prevailing view that heavy debt burdens will continue to push borrowing costs higher. Washington's attempts to manage the yield curve, such as Treasury Secretary Scott Bessent's intervention in the Japanese currency market and bond buybacks, have not effectively curbed the sell-off, with the market perceiving these actions as an attempt to talk down rates against underlying economic realities.
