While some market luminaries, such as bond guru Bill Gross, believe 2018 could call time on a 35-year bull run in global bonds, Ashburton Investments has gone to market with SA’s first world government bond exchange-traded fund (ETF). The new ETF will track the Citi World Government Bond Index (WGBI), which invests in fixed-rate, local-currency, investment-grade sovereign bonds. That means local investors will not have to use offshore allocations or obtain tax clearance to buy global bonds, as has previously been the case. The ETF tracks 23 sovereigns, including emerging markets in Mexico, Poland and Malaysia. Local government bonds account for 0.5% of the value of total holdings, although SA is still in danger of being booted from the WGBI should ratings agency Moody’s Investors Service cut the country‘s local currency ratings to junk. The biggest holdings in the ETF are US government bonds at 33.6%, followed by Japan at 19.7%, France at 8.4% and, curiously, Italy at 7.97%. Samanth...
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