Burke Koonce, Chief Investment Strategist and Principal at Trust Company of the South, was featured in a recent Dow Jones Newswires interview discussing higher U.S. Treasury yields and what they could mean for long-term investors.
With 10- and 30-year Treasury yields reaching multi-decade highs, Burke pointed to strong demand at recent auctions as evidence that buyers are finding these yields attractive. He also pointed to how a stronger-than-expected U.S. economy and the additional compensation investors require to hold longer-term bonds have contributed to the rise in yields.
Burke described fixed income’s continuing role in Trust Company’s portfolios, including diversified bond funds and the use of Treasury securities for specific liquidity and funding needs. He also noted the firm’s preference for slightly less interest-rate sensitivity than the broader bond market and increased allocations to municipal bonds given their attractive tax-equivalent yields.
