Safe Haven Assets Are Starting to Look a Little Different

The lack of a notable flight by investors to the usual defensive portfolio positions suggests that the perception of haven status has changed. As markets move toward Fed liftoff, possibly as soon as next month, a debate is picking up, not only about performance expectations for haven assets in an environment with potentially rising yields, but about which assets are likely to draw haven flows.

The global financial crisis, the subsequent sovereign debt crisis, and the resultant expansion of central bank balance sheets have shaken investors‘ perceptions as to what assets warrant haven status. Assets previously regarded as secure have proved to be anything but that.