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Investors have nervously anticipated the end of the Federal Reserve policy of stimulating U.S. economic growth with quantitative easing (QE3).  The June 19^th report by the Federal Reserve Chairman on the state of the economy reflected an unexpectedly positive view of the recovery.  As a result...

Clients aware of the recent stretch of low yields for U.S. Treasuries have been asking their managers to explain why their portfolios contain long bonds. Given that ten-year bonds have been yielding about 2% and thirty-year bonds around 3%, near historical lows for the U.S., many clients question their exposure to interest rate risk. In this article we will attempt to elucidate the role played by long bonds in a well-constructed portfolio, and to provide some additional talking points that could be helpful for the advisor addressing questions about long bonds from their clients.