Treasurys: Rumors of Demise Were Greatly Exaggerated

All the talk that US Treasurys were likely to get hammered this year have been unfounded, with investor appetite remaining strong for government debt despite a bevy of factors against it.

"The Chinese government has so much money to park that they don't have a lot of other choices," said Harry Rady, CEO of Rady Asset Management in San Diego.

Rady believes there is too much geopolitical and fiscal risk with Treasurys and holds a position in the ProShares Ultra Short 20+ Year Treasury [TBT 47.83 -0.04 (-0.08%) ] ETF that rewards investors for moves lower in the Barclays Capital 20+ Year US Treasury Index.

"There are a hundred different variables that could drive rates higher. We see a very asymmetric risk-to-reward ratio," he said. "A little bit of bad news could go a long way in the Treasury market, whereas good news wouldn't do much because rates are already so low."