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. 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. 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. "While the diversification on bonds has been disappointing so far, we do think that it will improve and materialize when it really matters," said Morgan Stanley's Andrew Sheets. "Were the price of oil to spike to our commodity team's bear case to US$130-US$150 a barrel, we think yields would start to fall as markets will turn more concerned of the effect of all of this on growth."