The recent backup in yields is happening at an unfortunate time. In nominal terms, debt held by the public is at an an all-time high (approximately $14.3 trillion). As a % of GDP, debt held by the public is at the highest level going all the way back to 1962 (76.6%). The estimated term premium for 6-year government bonds (or a close approximation for the 70 month average maturity length of government bonds) has also increased from -70 bps on 7/8/2016 to 4 bps as of Friday. Toss in the fact that the average maturity of treasury debt has increased from 49 months on 12/31/2008 to 70 months as of 9/30/2016 and this all adds up to a situation where it is becoming much more expensive for the US government to finance its budget deficit. This is worrisome with the prospect of larger US deficits on the horizon.
The Bedford Park Opportunities Fund returned 13.5% net of all fees and expenses in the second quarter of 2021, bringing its year-to-date return to 27.6%. Q2 2021 hedge fund letters, conferences and more In the fund's second-quarter investor letter, which ValueWalk has been able to review, Jordan Zinberg, the President and CEO of Bedford Read More