Q: US treasury bonds held by this fund have continued a downward trend, now at its 52-week low just under $13. Is this a good entry point, or is the risk profile too high and unpredictable due to the Trump factor?
5i Research Answer:
This fund has been disappointing, but to be fair it is not really its own fault. Long term treasuries are very sensitive to interest rates, and rates are sensitive to inflation. With the spike in oil, inflation risks have increased sharply, and even yesterday's inflation numbers were higher than expected, even before additional war impact. Thus, we think investors have time here and will likely get this fund cheaper at a later date.