Investor preference for U.S. government bonds will continue amid the plunge in global stock markets, says Andrew Canobi, portfolio manager at Deutsche Asset Management.

“Fundamentally people are concerned about growth, and that means there will be more money invested in U.S. Treasuries,” says Canobi.

Deutsche Asset Management says U.S. government 10-year bond yields may fall to 2 per cent. European investors are investing in U.S. dollar assets. That will be a major force in pushing U.S. government bond yields lower, says Canobi.

“The trend of investors looking at Australian bonds as low risk will continue,” he says. “But foreigners who have invested in Australia may take their money out.”

 

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