Rufaro Chiriseri of RBC Wealth Management said 30-year real yields have climbed to levels not seen since the global financial crisis [1].
This shift suggests a pivotal change in the fixed-income landscape. For investors, the rise in yields creates a more attractive risk-adjusted return compared with other fixed-income options [1].
Chiriseri, who serves as the head of fixed income for UK and Europe at RBC Wealth Management, said the trend during a Bloomberg Television interview on Wednesday [1]. She said that while the firm remains comfortable with shorter-term positions, the long end of the curve is becoming a viable alternative.
"We're actually happy to be sort of on the shorter end. But at the same time, it starts to look a lot more interesting with 30-year real yields at levels that we haven't seen since the GFC," Chiriseri said [1].
The interest in long-term real yields comes amid broader volatility in the bond market. Separate reports indicate that UK 30-year gilt yields have reached their highest level since 1998 [2]. This spike is linked to ongoing political concerns and inflation fears [2].
Real yields, which are nominal yields adjusted for inflation, serve as a critical benchmark for institutional investors. When these yields rise to historic levels, they often signal a transition in how capital is allocated between safe-haven assets and growth-oriented investments. The current environment reflects a significant departure from the low-yield era that followed the 2008 crisis.
“30-year real yields at levels that we haven't seen since the GFC”
The return of high real yields on 30-year bonds marks a shift away from the era of ultra-low interest rates. For institutional portfolios, this provides a rare opportunity to lock in guaranteed purchasing power over three decades, potentially reducing the reliance on riskier assets to achieve target returns.
