Bank of America strategist Savita Subramanian said bonds have, for the first time, become a competitive alternative to equities. She pointed to the U.S. 10-year Treasury yield, which has risen above 5%, and said the S&P 500 may fail to deliver annualized returns above that level over the next decade. Subramanian also said the backdrop for bond allocation now looks more favorable. In her view, U.S. Treasury yields are unlikely to remain above the 6% to 7% range on a sustained basis. The remarks frame bonds as a more credible option for investors comparing expected returns across major asset classes.
According to ChainCatcher, Bank of America strategist Savita Subramanian said bonds have become a competitive alternative to stocks for the first time.
She said the yield on the U.S. 10-year Treasury has moved above 5%, while the S&P 500 may not generate annualized returns above that level over the next 10 years.
Subramanian also said the environment for bond allocation is now more favorable, adding that U.S. Treasury yields are unlikely to stay above 6% to 7% on a sustained basis.
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