Finding Yield in a 2% World

7 Pages Posted: 4 Feb 2016

See all articles by Meb Faber

Meb Faber

Cambria Investment Management

Date Written: January 29, 2016

Abstract

Many investors are surprised to learn that the largest asset class in the world is foreign debt. US investors often allocate very little to foreign bonds, and when they do, it is through capitalization weighted indexes. These indexes allocate the highest weighting to countries with the most debt outstanding. Is there a better way to invest in global bonds? We examine a simple value approach applied to global sovereign bonds and find that it works well across decades. In a world of very low and even negative yields, a value approach could potentially add a well needed source of income to a diversified portfolio.

Keywords: bonds, stocks, etfs, value, global, sovereign, high yield, income, foreign bonds

Suggested Citation

Faber, Meb, Finding Yield in a 2% World (January 29, 2016). Available at SSRN: https://ssrn.com/abstract=2724737 or http://dx.doi.org/10.2139/ssrn.2724737

Meb Faber (Contact Author)

Cambria Investment Management ( email )

2321 Rosecrans Ave
Suite 4270
El Segundo, CA 90245
United States

HOME PAGE: http://www.cambriainvestments.com

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