When returns on safe assets fall, investors move some of their money to riskier assets. This ECB Blog shows: US Treasuries are replaced by global bonds, while substitutes for Bunds are mostly from Europe. This effect is smaller in times of market stress.

The original post was published on 06 January 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250106~7a7fd7104b.en.html

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Portfolio rebalancing: investors’ safe asset substitution patterns

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