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  5. TLT: Rick Rieder from Blackrock posted that fixed income is setting up for generational returns. [iShares 20+ Year Treasury Bond ETF]
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Q: Rick Rieder from Blackrock posted that fixed income is setting up for generational returns. Also "on a relative valuation basis, stocks cannot be considered the cheaper asset". Would you agree that its shaping up to be a big opportunity to buy fixed assets, and if so what tops your list? Thx
Asked by Adam on April 04, 2023
5i Research Answer:

With the assumption that rates have peaked, the best bond returns will come from the long end of the curve. XLB and TLT can be suggested here. We are less sure on the 'cheaper asset' theory. Stocks can still do well in an inflationary environment, bonds less so. So, if rates have not peaked, stocks could still outperform. If we take out five or six companies out of the S&P 500 index, valuations are pretty good. Small and mid-cap valuations are near historical lows. Both stocks and bonds can do well at the same time. There are stocks that will double in a better environment, and bonds will not have that degree of upside. As usual, we think balance is the best approach. 

Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in TLT.