Standard & Poor’s isn’t the only one warning on the dangers of debt.
Mutual fund and exchange traded fund (ETF) manager Rydex/SGI recently released a white paper that “identifies potentially serious interest rate and credit risks that could affect all segments of the bond market.”
The firm manages a mutual fund that inversely correlates to the movement of Treasury bonds.
“Now that the worst of the economic crisis seems to have passed, investors appear to be disregarding recent history and piling into bonds as some kind of safe haven,” said Kirk Barneby, a Rydex/SGI porftolio manager and author of the report. “There is, however, no ‘risk-free’ or even ‘low-risk’ scenario on the horizon for most fixed-income assets. We’re concerned that’s a future for which many fixed-income investors are simply not prepared.”