Safe-Haven Assets Needed. They Don’t Even Need to Be That Safe

(Bloomberg) — Corporate debt, collateralized securities and even stocks may not sound like the sort of assets money managers would seek out for their haven qualities. Yet a slide in global bond yields is forcing investors to look outside of the usual refuges as they hunt for stable assets that provide at least a modicum of return. Gene Tannuzzo, who oversees the $4.8 billion Columbia Strategic Income Fund, says he’s adding investment-grade corporate bonds from Europe for the extra yield. Sarah Lange, a senior fixed-income portfolio manager at Pentegra, is “begrudgingly” seeking out asset-backed debt. Craig Pernick, the head of fixed income for Chevy Chase Trust Co., was even tempted recently by a non-convertible dollar bond from China’s Weibo Corp.

“Everybody has their own definition of safe haven, and it seems people are loosening that definition in search of yield,” said Pernick, whose firm manages $30 billion in assets. The challenge these days is “not falling into the trap of changing strategy too much.”

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