Owen Murray in WSJ.com article on Inflation-Protected Bonds

Owen Murray, director of investments for Horizon Advisors, was interviewed by Daisy Maxey for her WSJ.com article titled, “Advisers Dump TIPS as Inflation Threat Wanes.”

The article reads in part,

With inflation appearing a more distant threat, some financial advisers have lost their appetite for the Treasury Inflation-Protected Securities they gorged on in recent years…

…TIPS prices had become irrational, said Owen Murray, director of investments at Houston-based Horizon Advisors, which manages $205 million. He began purchasing 10-year TIPS in the first half of 2009 when they yielded around 2%–almost equal to the yield of plain-vanilla Treasuries. “We weren’t paying any premium at all for the inflation protection,” he said…

…But by the spring of 2011 after strong gains, the TIPS yielded just 1% while the Treasury yields had risen to 3% or 3.5%, he said. “Lower-yielding securities are more sensitive to interest rates so 1% we didn’t feel was good compensation for the risk,” Mr. Murray said.

Paid subscribers to the Wall Street Journal can read the full article here.


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