Friday, February 2, 2018

Long-Short (Equity-Bond) Investment

Given the historically low interest rate, some investors with long time horizons (philanthropies as an example) are issuing long-dated bonds (i.e., going short) and using the funds to invest (i.e., going long) in the equity markets. As long as equity markets outperform bonds over the time period, the trade creates a positive return. See article here, WSJ.

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