The Globe and Mail reports in its Wednesday edition that bonds have failed to shield investors during the Iran war, but now some fund managers say that may be about to change, with debt poised to reclaim its safe-haven role if inflation starts hitting growth. A Reuters dispatch to The Globe says world equities, which dropped in the first few weeks of the war, are back near record highs, fuelled by enthusiasm over AI and corporate earnings, while sovereign bonds have been hit hard by fears of a protracted rise in inflation, which has driven government borrowing costs to multiyear and even record highs in some cases. That has not deterred investors from buying bonds. Lipper data show that since the war broke out, a net $12-billion (U.S.) has flowed into developed-market government bond funds, accounting for all of the inflows this year. However, the pressure on debt markets means that since late February, safe-haven 10-year Treasuries have delivered negative returns of 1.5 per cent. The most recent survey of global fund managers from Bank of America showed investors are the most underweight in bonds since June, 2022, and covering a short position in fixed income right now would qualify as a contrarian trade.