Ashish Shah, AllianceBernstein

Not keep quiet and ten year treasury bond today US treasury bond that is your receive one point 65%. Interest. Per year for the next ten years. Not many people I know that are willing to do that. We're joined now by Aziz shock from Alliance Bernstein he's gonna talk to us about bond investing -- he sure welcomed the Sho RE doing. Thanks very and doing fantastic here. Good -- you know it's it's a tough market right now offer fixed income investors because. IE not many people are are really interest in buying a ten year treasury -- 65. So what should investors be doing that are looking to make a little bit more interest on their money in once one point 6% turn ten years. So I think they're they're two approaches they can taken it really comes down to how you can use fixed income in your portfolio. Armed they're people like he's six incumbent as -- defense is approached. And that defense there's talk that terrorists that comes from the stock part of their portfolio. There will we would recommend -- slower rate in the US as close and some other countries we would think it makes a lot has to go global. And the other very importantly if you're gonna go global. What you wanna do is make sure -- you're going global and edging out your currency risk comes currencies can make your -- country about it equity fund. What do you mean by that when you say go global if you talk about places like Brazil and China India. So I think you can include those places but yes certainly there are other countries like Canada. Australia that -- interest rates that are higher than in the US but -- just based in kind of sound -- that you would expect. Until global bond fund is committed to a good job for you and diversifying your rescue today as close convenient opportunity that that's much greater than the US. Now will the prospectus for the mutual fund typically TI explain whether they have any hedging strategy there for currency risk. That respect is stolen it totally well enough times you'll you'll see that and and the headliner the one picture. Okay what about emerging market debt you know you look at a country like Brazil we can use them as an example. As there economy strengthens over ten or twenty years wouldn't the value of their bonds increase over time. So you know it -- that growth is a great thing for equities that growth doesn't necessarily always a good thing for her bond investors. Home instead of looking at pure EM -- we'd prefer to do is actually look at all the it'll come sectors whether it's US high yield. Global IE old you know European debt and to an income importantly emerging markets debt. What about domestic high yield and we're talking of course about junk bond funds you can buy ETFs like. In high yield. Who is is that market is that domestic high yield market become too expensive as he. So here it definitely performed very well -- -- high yield is up around 10% this year -- you know that's a pretty good return her. Six and come but the one thing I would I would say is that there is still opportunity there it's just gonna be lower than it has been in the past. The second point I would make is that any PS is a really bad way to go when it comes to investing in the ideal because your -- actually buying all the debt that people want to take issue into that that's in their benchmark. Yes so you're not getting the selecting your your you have to buy everything the good the bad and the ugly right. Can't exactly India if you look at the historical returns as CE TF funds come they haven't been very good relative to their benchmarks. What about US treasury who is spying on me as I look at you know the demand seems to be very high for the ten year in the five year in -- like. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Well you know there are lots of investors out there that need to -- -- of the need to know that there are such -- -- money dead end and the problem is that there are fewer and fewer of those risk free assets. Out there particularly as Europe has become harmless little less than -- -- place from a government perspective. And and European debt is it too early to start venturing you know you know you look at countries like Spain and Italy. You know you buy a ten year Spanish bond treasury bond there have yielded greater than 6% does it too risky and too early. We think it's still on the early side you police ceased being downgraded to below investment trade and in the course of the next couple months by Moody's and that's certainly be a good thing when you have yet -- trillion dollars worth of debt. Downgraded below investment -- What happened to the yield on if he gets downgraded that severely. You know and I think a lot of that is gonna come down to what happens. PCP and whether they decide to step up and buy a lot of that paper. If it you know maybe we need take risks like that there can be high reward -- wit what's this what's the buying signed from your perspective when would you be willing to buy. Some of their European debt that's out there can you can get is southern European debt seems like you can get a great investment on -- if they survive. That's a big question that I whether Italy and in Spain survives at all. One night I think that brings up a really good point which is he evil if you're investing in a bond portfolio you don't wanna make of that -- huge that in your overall portfolio as to whether one country surprised or not and that's why it makes sense steps. And I have a diversified pool of these opportunities and that's what we'd do and our high income portfolios is that. We we look at each quarter -- he's serious whether it's European debt. High -- that emerging markets steadily picked what we think they're gonna be the best opportunities in each of those markets and put them together a portfolio create. Very good Rosie should thank you very much I appreciate your time. That's as each shot joining us today from Alliance Bernstein today on the financial exchange and we have some opportunity here to answer some text questions this. Our text number is 686. CD June -- will be serving as your interpreter -- -- your tax questions to us at 68680 we'll get back to them. 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