Capital Group argues traditional developed-market government bonds may no longer be sufficient as portfolio ballast, requiring a more dynamic global fixed income approach across sectors, regions, and currencies.
- Record developed-market borrowing and shrinking central bank balance sheets may reduce the stabilizing role of sovereign bonds.
- Capital Group highlights EM debt, investment grade credit, securitized assets, and currency positioning as alternative diversifiers.
- The firm notes today’s higher yields improve both income potential and capital appreciation upside if rates fall.
- Global bond markets now exceed $150 trillion, creating a wide opportunity set for active managers.
Their message is clear: the old 60/40 toolkit still matters, but static bond exposure may no longer be enough.
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