Questions around whether bonds offer the same protection against market shocks With interest rates at zero in many developed markets and a less stable correlation between equities and bonds, the Schroders multi asset team argues that government bonds will no longer provide the cushion in a portfolio that they once did. Lesley-Ann Morgan, head of multi-asset strategy at Schroders, said the zero interest environment is leading the team to reassess the roles that conventional asset play within their multi-asset portfolios and if they need to look elsewhere to meet their return objectives. “Short-term US government bonds now yield around zero,” she said. “Not only does this impact returns, but it meaningfully raises the cost of buying the US dollar, either for hedging or return-generating.”