For some, U.S. 10-year yields piercing 3 percent is just the latest evidence of the end of the decades-long bull run in bonds. Others say it’s a great re-entry point, because fears about a break-out in inflation are overblown.
One unrepentant bull is Andy Seaman, chief investment officer at London-based Stratton Street Capital LLP, which says it manages about $1.5 billion. Much as Japan’s experience has shown how demographic trends can contribute to weak price pressures, Seaman sees low fertility rates and expanding ranks of the elderly across the world putting a lid on inflation.
That all means investors should buy duration -- that is, longer-dated bonds, Seaman argued in an interview while visiting Hong Kong earlier this month.
“There are a huge number of countries that going to have smaller populations, so it seems unbelievable in my mind that anyone thinks inflation is around the corner," Seaman said. "What do you think is going to happen to interest rates, inflation and growth -- it’s going to fall.”
Source:https://www.bloombergquint.com/business/2018/04/25/get-back-into-bonds-inflation-not-coming-unrepentant-bull-says