Mr. Market's Global Bond Market Allocations

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 |  Includes: AGG, BND, BNDS, BWX, ELD, HYG, JNK, LQD, SCHZ, TRSY
by: James Picerno

Last week I sliced up the allocations for the global equity markets as of May 31, and today I do the same for fixed-income. But first, the standard caveat. Categorizing the global bond market’s components is tricky. Equities, by contrast, are relatively transparent. For simplicity, I'm streamlining the fixed-income analysis, although no one should confuse the numbers below as the last word on the global bond market mix. For instance, I'm leaving out US munis and collateralized debt.

The source for the investment-grade data is Citigroup, with the high-yield data coming from Markit, and all the numbers reflect market closes at the end of last month. Let’s begin with the big picture for US bonds.

Compared with the February update, US governments’ relative share ticked down a bit while US investment-grade corporates and junk is up slightly:

Comparing the US bond market overall with the rest of the world, the US slice climbed slightly in relative terms since the previous update:

Next, here’s how the foreign markets stack up on an ex-US basis. The main changes since February: foreign developed-market governments and investment-grade corporates hold modestly smaller pieces of the capitalization pie and emerging market governments and foreign high yield have increased their shares a bit:

Here’s how everything compares in relative terms. Overall, not much has changed since the previous update in February, although the relative allocations for US bonds overall ticked up: