Gavekal Capital: Why Not Just Buy The US 5-Year Treasury?

Thursday, March 19, 2015

Why Not Just Buy The US 5-Year Treasury?

The collapse in yields around the developed world is startling. For fun, we wanted to see how many 5-year or longer dated government bonds are currently yielding less than the US 5-year on-the-run treasury bond (which is down 23 bps YTD itself). Looking at the list below, is it at all surprising the USD has been on such a tear?

The US 5-year treasury bond is currently yielding 148 basis points. Here are some notable bonds that are yielding less than the US 5-year:

Canadian 10-year yield is 15 bps lower
Japan 30-year yield is 23 bps lower
German 30-year yield is 85 bps lower
France 30-year yield is 41 bps lower
Belgium 30-year yield is 47 bps lower
Denmark 30-year yield is 89 bps lower
Italy 10-year yield is 26 bps lower
Netherlands 30-year yield is 77 bps lower
Spain 10-year yield is 24 bps lower
Sweden 30-year yield is 56 bps lower
Swiss 30-year yield is 109 bps lower

What the rest of the world is yielding...

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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