Global investment bank Jefferies has made a substantial commitment to Indian government debt, allocating 25% of its global sovereign bond portfolio to Indian rupee 15-year government bonds. This strategic move, detailed in its October 1, 2026 GREED & fear report, highlights the attractive 7.38% yield offered by these long-duration Indian securities.
The Jefferies global sovereign bond portfolio is diversified across four key emerging markets: China, India, Singapore, and Brazil. India's 25% share in this portfolio matches the allocation to Singapore dollar 10-year bonds. Other allocations include 20% to China renminbi five-year bonds and the largest portion, 30%, to Brazilian real 10-year bonds. The portfolio boasts an average yield of 6.97%.
Emerging Markets Outperform Developed Nations
This significant allocation to Indian bonds comes as developed-market bond yields experience a sharp increase. Jefferies noted that the US 10-year Treasury yield had climbed to 5.34%, with the 30-year yield reaching 5.69%—levels not seen since 2002. This trend reinforces the firm's perspective that G7 government bonds have entered a structural bear market, ending a decades-long bull run.
In contrast, emerging-market local-currency government bonds have demonstrated robust performance. The Bloomberg Emerging Markets local-currency government bond index has outperformed the Bloomberg G7 government bond index by 59% since March 2020. Jefferies' own global sovereign debt portfolio has also delivered stronger returns, gaining 2.9% in the September quarter in US-dollar total-return terms, compared to a 2.7% decline in the G7 government bond index.
India's Strategic Position in Jefferies' Portfolio
Year-to-date, Jefferies' portfolio was up 4.8%, while the G7 index was down 4.2%. Since its inception on March 26, 2020, the portfolio has surged by 39.8%, significantly outperforming the G7 government bond index, which saw a 19.4% decline over the same period.
The inclusion of Indian 15-year government securities, with their competitive 7.38% yield, places India prominently within Jefferies' strategy. This allocation is a clear indication of the investment bank's confidence in the relative strength and yield opportunities present in Indian debt and the broader emerging market landscape.