Survey shows investors adding longer-dated Treasuries after Bernanke Congress testimony

By IVCPOST Staff Reporter

Jul 23, 2013 02:04 PM EDT

After Federal Reserve Chairman Ben Bernanke appeased worries about increasing interest rates, investors have now raised their holdings of long-dated Treasuries. This was revealed in a survey conducted by J.P. Morgan Securities on their clients. According to the results, 23% answered that they went "long" on their Treasuries. This was an increase from last week's result which showed only 21% holding "long" on their duration of U.S. bond bets.

Longer-dated treasuries give higher returns compared to short-term debt instruments in the event of a market rally because of the added interest rate risk. Longer-dated Treasuries have made it to the portfolios of many investors from the third quarter after bond funds and exchange traded funds became unpopular in late May and June. This was triggered by fears that the central bank will trim its US$85 billion bond buys each month later in the year. However, Bernanke's testimony in Congress has calmed investors.

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