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Northern Trust Takes Low-for-Longer View on Rates

The $1.1 trillion money manager leans in to duration and higher ratings in credit, indicating a belief that interest rates won’t rise substantially anytime soon.

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Northern Trust Asset Management, the $1.1 trillion money manager, is betting against rates going much higher by loading up on duration in credit. The contrarian bond play involves buying higher-rated U.S. junk and investment-grade bonds, which will perform better if Treasury yields stay low.

“The most amount of credit risk you’re willing to take and the most amount of duration risk you’re willing to take—that’s where the most positive spot is right now,” Colin Robertson, head of fixed income at Northern Trust, said in an April 29 telephone interview. “That’s where I’m going to get the biggest bang for my buck.”

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