Long-term bond investors: Fund industry veteran expects bond market to usher in a rebound.

Long-term bond investor Chris Iggo delivered a parting message to the market on the occasion of his retirement: after four difficult years, the bond market is poised for a rebound. "In my view, despite widespread concerns about inflation, government borrowing, private credit, and surging corporate borrowing, bonds are now more attractive than they have been in years," he wrote in a report on September 25. "Warnings about a fixed-income disaster might have been more appropriate in 2022 than in 2026." Iggo issued his bullish prediction at a time when global bond markets are experiencing severe turbulence. So far this year, fixed-income assets have fallen sharply as the Iran war pushed up oil prices and intensified inflationary pressures. At the same time, widening government deficits and heavy debt burdens have forced investors to demand higher yields before they are willing to hold sovereign debt. In recent weeks, bond yields in the United States, Japan, and the United Kingdom have all climbed to multi-year highs. Investors are debating whether these bonds currently offer investment value, or whether they face the risk of further declines while inflation and fiscal risks remain unresolved. "As a veteran of the bond market, I believe returns on fixed-income assets over the next year could be quite substantial," he said. "Long-term bonds have already endured a four-year bear market. Term premiums have risen. Now is undoubtedly the time for improved returns."