Join our community of smart investors

A missing asset

In truth, this is a long-standing problem. MSCI researchers and Jay Ritter at the University of Florida have both shown that economic growth only rarely translates into equity returns.

In theory, there is a simple solution to this problem. Investors should be able to buy GDP-linked bonds. These are government bonds whose interest and principal are tied to GDP growth: they pay out more when the economy does well and less when it contracts, much like index-linked bonds' payouts are tied to the inflation rate.

To continue reading...
REGISTER FOR FREE TODAY
  • Read 3 articles for free each month
  • Educational articles and topical investment guides
  • In-depth podcast episodes by our writers and industry professionals
  • Interactive live webinars on investment themes that matter
Have an account? Sign in