by Duwi Yogeswaran

The “Bond Brothers” Roshan Thiru and Rohan Thiru recently sat down with me to discuss their thoughts on inflation, interest rates and asset valuations. To kick start our conversation, the pair shared personal anecdotes from their childhood. Growing up in Tuxedo Court in Scarborough, the Thiru brothers faced obstacles common to many first generation Canadians including navigating the cultural differences between an old home and a new one. Taking inspiration from role models, largely their parents and each other, the siblings went on to carve out successful careers in the Canadian bond business. Roshan is the Head of Canadian Fixed Income at Manulife Investment Management and Rohan is a Fixed Income Portfolio Manager at Canoe Financial. As Roshan pointed out, having such similar names and working in the same business has led to some hilarious moments.

We got to chatting about the pair’s take on the market. Though strong headline numbers and unprecedented amounts of fiscal stimulus have ignited inflation fears, Roshan thinks it will be largely transitory. In his opinion, a short-term pop in prices is likely as we come out of this pandemic, but the structural factors required to sustain elevated levels of inflation through the cycle aren’t there. Inflation hasn’t been an issue for the Western world for a very long time owing partly to technology, demographics and globalization and in his view, these factors remain firmly entrenched. Roshan went on to succinctly summarize the consequences of the prolonged low rate environment we’ve all been living in – enormous levels of debt, slowing economic growth, heightened real and financial asset valuations, and a wider gap in wealth disparity.

Next, younger brother Rohan took us through his forward looking rates thesis – a scenario where negative rates are possibly forced on the Fed as they run out of tools. He believes global growth peaking and the deflationary nature of debt will keep rates low and possibly lower for a long, long time. With respect to Canadian housing, Rohan pointed to immigration as largely responsible for the continued acceleration of the housing market – our country is void of the geopolitical issues facing other Western countries which he believes makes it very desirable for immigrants. According to Rohan, the Canadian housing market is still relatively cheap compared to other countries with room to run higher.

To wrap up, I asked the pair for takeaways to leave our audience with. We touched upon the importance of saving and being financially prudent. As Rohan so eloquently put it, “if you live frugally, it gives you so much more flexibility to be intellectually honest”. We also discussed the significance of tenacity. Numerous studies have honed in on the attribute as critical to achievement and success – being passionate about long-term goals and having the perseverance to work towards them is essential. Earlier in our conversation, the Thiru brothers highlighted their parents’ tenacity as immigrants in a new land. Though our struggles may pale in comparison to those of our parents, it’s that same tenacity and grit to bounce back from defeat that will help propel us forward, not only in our careers, but also in life. As our parents and role models have shown us, when the going gets tough, the tough get going.

Duwi Yogeswaran is a Director of Global Markets at BMO Capital Markets, and serves on the Advisory Council for Tamils in Finance.

This article is re-published from the May 2021 issue of “Street Talk”, TiF’s flagship publication. Interested in writing for us? Click here for our submission guidelines.

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