The Risks Lurking in "Safe Haven" Treasury Bonds

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The Risks Lurking in "Safe Haven" Treasury Bonds

Pantera IGS Fund Update and EMTN Market Info

How's this for an investment opportunity: a guaranteed yield of

3.27 percent, with an enormous potential downside. As risky as

that sounds, millions of investors are moving money into

Treasury bonds as a "safe haven."

http://bloom.bg/qenOlL

Bloomberg, 19/9/2011

This article in today’s Bloomberg describes the risks for investing in and holding longer maturity US government bonds within fixed-income portfolios. With Treasury 10-year rates at 2% and 30-year rates at 3.25%, the potential for bond price depreciation if inflationary pressures reappear are enormous. There is also long duration risk and price volatility, which is being experienced in both the equity and bond markets that makes daily generated marked-to-market reports for portfolio managers difficult to ascertain.

As we had advised in our last market update report in June, this article stresses that fund managers should be adding to their cash positions. The Pantera IGS Fund is an alternative cash fund that will invest in time deposits at the highest-rated banks in Europe to use as collateral for MTN trading, which would bring down the volatility and duration risk of any fixed income portfolio, and potentially add to the upside by creating cash profits from each MTN transaction. The cash profits would stay within the Fund, and increase the cash NAV to be calculated at the end of each month.

The Pantera IGS Fund uses a distribution model instead of an investment to produce anticipated total returns. Our conservative trading strategy would enhance risk-adjusted returns for any portfolio, along with having the principal protection of AA-rated time deposits. –Mark Porcelli

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