Government bonds are often referred to as risk-free or safe-haven assets, and, in the right context, this is a correct label as they are low volatility investments that represent money lent to a sovereign nation with almost no risk of default. However, in the first half of 2022, a diversified portfolio of global government bonds returned -13.3% in CAD terms. So, how do we reconcile an outcome like this with the near-risk-free or safe-haven aspect of the asset class?