Today s bond market is riskier and more volatile than in several generations. As
|
|
- Damon Ray
- 8 years ago
- Views:
Transcription
1 Fixed Income Approach 2014 Volume 1 Executive Summary Today s bond market is riskier and more volatile than in several generations. As interest rates rise so does the anxiety of fixed income investors who rely on the bonds in their portfolios for consistent long-term income generation and risk reduction. Bonds will always have a place in a thoughtfully managed portfolio, however it's apparent their role, and investors expectations of them, will need to change in accordance with the times. This edition of PortfolioBuilder examines the dynamics of a rising interest rate environment, the expected impact on bond investments, and Cornerstone s active approach to this perennial asset class. 1
2 Great Expectations Generations of investors have relied on blended stock and fixed income portfolios to deliver consistent long-term returns and sustainable cash flows while mitigating the risk of a stock market correction. The concept of a 60% stock / 40% fixed income portfolio, introduced in the 1950s when Modern Portfolio Theory was first developed, has served investors well. This simple portfolio has seen an annualized return of 8.75%¹ over the past five decades. income continues to have a place in a thoughtfully managed Fixed portfolio..." The market turbulence of the past several years has called into question the validity of a 60/40 portfolio structure. Following the substantial market decline of , many investors shunned stocks while pouring money into fixed income investments. What happened next? From the market lows in March of 2009 to the end of 2012, stocks returned 126.4% while fixed income returned only 19.7%.² In 2013, after missing a substantial portion of this stock market rebound, many investors liquidated fixed income investments and returned to the stock market because they believed the fixed income market would dramatically decline due to a swift rise in interest rates. The Root of the Risk Quantitative easing, an unconventional policy for unconventional times, was the federal government s solution to stimulating the economy in response to the global financial crisis. In the fall of 2008, during the middle of the crisis, the Federal Reserve and other central banks around the globe slashed short-term interest rates to near zero, boosting fixed income prices and reducing their yields. In normal circumstances, this would be the most accommodation they could provide. Since then, as the economy has required even more stimuli, the United States and a number of other countries employed quantitative easing as an additional economic boost. Quantitative easing increases the money supply and suppresses market interest rates with the intention of encouraging economic growth. Quantitative easing cannot continue indefinitely without causing inflation and currency devaluation. 2
3 The good news is that the U.S. economy appears to be strengthening, as evidenced by a rebound in the housing market, gains in employment, and record highs in the stock market. This is very encouraging, and hopefully sustainable. The bad news is that as the economy stabilizes, quantitative easing will need to be reduced and eventually discontinued. In late December, the Federal Reserve took the first step by announcing a reduction in the pace of quantitative easing from $85 billion per month to $75 billion per month. But exactly how this will play out remains in question, and therefore creates an environment of uncertainty for fixed income investors. Interest rates, as measured by intermediate Government bonds, have already doubled since their lows in July of 2012 and are now only half a percent less than the average yield for the past decade. A likely scenario contemplates a gradual rise in interest rates throughout 2014, with a continued tapering of quantitative easing. A slow rise in rates, rather than another sharp upturn, is anticipated due to modest current economic growth and relatively low inflation. This should allow fixed income investors to reinvest maturing assets at higher yields, mitigating any near-term decline in prices. The Federal Reserve has stated their intention to end quantitative easing later in 2014 while holding out the option of expanding the program if there is a stall in economic growth. Because this is such a dynamic environment, it is critical to continue to diversify investment portfolios across assets and strategies that can perform in any number of eventualities. In these diversified portfolios, fixed income continues to hold a strategic corner, although in a different manner that reflects the realities of the current climate. Fixed Income: Still Relevant, Still Reliable Part of fixed income's appeal has always been the contractual nature. Investors know at the time of initial investment the amount of income that will be disbursed and at what intervals a predictability that allows for accurate cash flow planning. While the value of an existing fixed income investment will fluctuate with market conditions, cash flows generally do not. Even though interest rates currently reside at some of the lowest levels on record, investors can still reasonably expect income and full principal to be received on a known schedule. In this way, fixed income remains a solid source of liquidity and cash flow for strategic investors 3
4 despite the shifting economic climate. Fixed income investments provide a smart hedge against steep declines in the equity markets, bringing balance and assurance to owners of a diversified portfolio. They also offer the investor a level of protection against deflation in ways other investments cannot. Deflation, defined as a general decline in prices, can be very damaging to the economy and most investments. However, high quality fixed income with its contractual rate of interest is one of the only investments that actually becomes more valuable during deflationary periods. income remains a solid source of liquidity and income Fixed for strategic investors..." One truth has not changed, no matter what the economic outlook: fixed income remains one of the most reliable means of dampening the volatility of a portfolio. Our Proactive Approach While fixed income continues to play an important role in a diversified portfolio, fixed income market opportunities are likely to be far less robust than they have been over recent decades. While the U.S. fixed income market averaged nearly an 8.0% return over the past 30 years, Cornerstone forecasts a 3.0% return for the decade to come.³ With this in mind, investors must make prudent decisions on how to approach the fixed income market of the future. Just as the market environment has been evolving for many years, so has Cornerstone s strategic approach to fixed income investments. Since market opportunities began to decline over five years ago, we have steadily reduced our core U.S. fixed income exposure4 in favor of other income producing and risk-diversifying asset classes.5 In 2008, our fixed income allocation was 100% in core U.S. fixed income; by 2012 within our fixed income equivalents allocation core U.S. fixed income was reduced to just over 50%. Going Global & Hedging Inflation Risk (2009) In March of 2009, Cornerstone recommended clients allocate 15% of their fixed income portfolio to global 4
5 fixed income strategies. Our team managing this portion of client portfolios had a strong preference to allocate away from the largest developed markets in favor of smaller and emerging economies that were paying relatively high interest on fixed income assets maturing over short time periods. This strategy provided geographic diversification, an increase in income, and a reduction in sensitivity to rising U.S. rates. At the same time, we recommended clients incorporate real asset strategies that could appreciate during periods of increasing inflation. One-third of the real asset strategies were funded from fixed income. Global Encore (2010) As quantitative easing continued to lower interest rates in developed countries, we increased our portfolio allocation recommendation for global fixed income from 15% to 25%. This further enhanced geographic diversification, increased income and reduced sensitivity to rising rates. Portfolio Building Blocks (2012) In August of 2012, Cornerstone launched our Portfolio Building Blocks a set of new strategies to increase diversification, provide for specific investor solutions, and mitigate certain risks. A further reduction in U.S. fixed income was merited in order to fund these new strategies. This effectively cut the weighting of U.S. fixed income to half of its original 2008 weight. Figure 1 Cornerstone Fixed Income Allocation Over Time U.S. Bonds 100% U.S. Bonds 80.7% Global Bonds 14.3% Real Assets 5.0% U.S. Bonds 71.2% Global Bonds 23.8% Real Assets 5.0% U.S. Bonds 50.6% Global Bonds 16.9% Real Assets 5.0% Income Opportunities 7.5% Public Alternatives 20.0% 5
6 This proactive and strategic approach to portfolio evolution came about through our commitment to active management. The active management of our investment solutions allows us to carefully balance the risks and benefits of investing. This is in contrast to passive fixed income strategies that simply determine holdings based on the amount of outstanding debt. In other words, the most indebted borrowers become the largest weights in the passive index. Our belief is this method is the exact opposite of how investors should approach investing in fixed income. Figure 2 Cornerstone Fixed Income Solutions Versus the Bond Market $1.45 $1.40 $1.35 $1.30 $1.25 $1.20 $1.15 $1.10 $1.05 $1.00 CAI - Taxable Global Fixed Income Model Investible Benchmark Index Cornerstone hires managers who make active strategic decisions on what geographic regions, sectors, companies, rates, curve exposure, and countries provide the best opportunity for success. Over time, our managers increase or decrease exposure to interest rates, find opportunities in currencies other than the U.S. dollar, and determine appropriate levels of credit risk to assume. 6
7 Conclusion While interest rate pressure currently remains in check, we believe a meaningful rise is inevitable but not imminent. The U.S. Federal Reserve has indicated their target rate will stay at zero for a considerable amount of time after quantitative easing concludes. This policy is likely to tether short-term interest rates for years to come. Although fixed income investments face challenging conditions, they remain a core component of any durable portfolio. At Cornerstone we recognize investing in fixed income in today s environment is sufficiently different from the past three decades and a thoughtful, proactive approach is paramount. This is why our strategy has methodically evolved over time, enabling us to increase diversification and provide sources of income above levels achievable in a traditional fixed income portfolio. As more clarity is established on interest rate policy and the quantitative easing program, so too will the outlook for the global economy. Expect our fixed income strategy to continue to evolve proactively over time, so we can continue to optimize the income generation and risk reduction benefits of fixed income in our portfolios appropriate for the economic climate. 7
8 Disclosures PortfolioBuilder is the name Cornerstone uses for its method of blending components from complementary asset classes together to create client portfolios capable of achieving expected returns that meet client objectives, while controlling risk. Building Blocks is the convention Cornerstone uses to describe a group of similar assets or strategies designed to achieve specific objectives and mitigate certain risks. The variables used to calculate return figures come from a variety of credible financial research studies and historical return data sources, such as the Ibbotson Associates Stocks Bonds Bills and Inflation (SBBI) return series and other index providers. Results are compared with published forecasts from leading institutional investment firms for reasonableness. The underlying data for this report have been based on third-party data & performance. While we believe this information to be reliable, Cornerstone bears no responsibility for errors or omissions. Cornerstone s forecast should not be relied upon as a predictor of future investment performance. Performance is for illustrative purposes only. It does not represent an actual client portfolio. Individual client portfolios will differ depending on inception date, existing holdings, account size, tax/cash-flow considerations or other account restrictions. The possibility of profit and loss exists. 1 Stocks representative of the Ibbotson Associates SBBI S&P 500 Index Total Return 60% weight, Bonds representative of the Ibbotson Associates SBBI Intermediate Government Bond Index Total Return 40% weight, rebalanced annually at year end. Data through 9/30/ Stocks representative of the S&P 500 Index Total Return, Bonds representative of the Barclay s U.S. Aggregate Bond Index Total Return, rebalanced annually at year end. Data through 12/31/ Bonds representative of the Barclay s U.S. Aggregate Bond Index Total Return. Cornerstone forecast for U.S. Bonds is based on an inflation assumption of 3.0% reduced by 1% due to negative real yields, plus a 1.0% bond horizon premium and a 0.50% credit premium. This is not an offer or solicitation with respect to the purchase or sale of any security. Opinions expressed are our present opinions only. The material is based upon information which we consider reliable, but we do not represent that such information is accurate or complete, and it should not be relied upon as such. This information is subject to change. There is no guarantee that the forecasts made will come to pass. Investment involves risk. The advice may not be appropriate for the reader s specific situation, risk tolerance and financial goals and they should consult with a Cornerstone representative for specific advice. 4,5 FIGURE 1 - Cornerstone s Fixed Income approach and allocation modifications are based on the Cornerstone Liquid Global Model 60/40 portfolio from 12/31/ /30/2013. FIGURE 2 CAI Taxable Global Fixed Income Model net of underlying investment expenses. CAI Taxable Global Fixed Income Model (Net CAI Fees) includes both underlying investment expenses and Cornerstone s maximum advisory fee of 1.00%. Investible Benchmark Index represented by the ishares U.S. Aggregate Bond ETF (AGG). Performance results portrayed are recommended model investment portfolios and are not actual returns an investor has earned. The possibility of profits or loss exists. There are inherent limitations on model results as they may not reflect the impact that material economic and market factors might have had on investment decision-making and they do not represent actual trading. Results do not reflect the effect of paying taxes. There is no guarantee of future results and there is the potential for loss of capital. Future securities market conditions may be impacted by factors that cannot be accounted for using these techniques. No representation is being made that any investor will, or is likely to achieve results similar to those shown. The results shown are hypothetical and are not an indicator of the returns a Cornerstone client will realize in relying on Cornerstone s methodology, or any allocation or model mentioned. Certain securities contained in the model portfolio do not relate, or only partially relate to the type of advisory services currently offered by Cornerstone. The allocations or models mentioned do not take into account financial, investment, or other objectives, and may not be suitable for any particular investor. Before investing, investors should consider whether the investment is suitable for themselves and their portfolio. Additional information about this analysis is available upon request. Certain securities contained in the model portfolio do not relate or only partially relate to the type of advisory services currently offered by Cornerstone. This presentation is intended for a one-on-one basis only. Past Performance is no guarantee of future results. Performance of individual accounts may vary from Model results. Results shown as of 12/31/13. Model Pre-Tax Returns are net of fees of the underlying Mutual Funds. They do not include Cornerstone s management fee nor the impact of taxation on any purchases, sales, income, short-term capital gains or long-term capital gains, all of which would reduce results. Cornerstone s advisory fees are discussed in Part II of the Form ADV. Results reflect reinvestment of dividends and other earnings. The Liquid Global Taxable Fixed Income Model is currently composed of Mutual Funds. The inception date is December 31, The following model components are used with differing weights over time: US Intermediate and Global Bonds (see below). The performance displayed herein represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost, and current performance may be higher or lower than the performance quoted. Liquid Global Taxable Fixed Income Model The Policy Benchmark is the Barclays U.S. Aggregate Index and represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Indices are unmanaged and not available for direct investment. Model Portfolio over time (all are annually rebalanced): Asset Class Cornerstone Liquid Global Taxable Model Time Period 12/99-3/09 3/09-6/10 6/10-Current U.S. Intermediate Bonds 100% 85% 75% Global Bonds % 25% 8
LONG-TERM INVESTMENT PERFORMANCE
LONG-TERM INVESTMENT PERFORMANCE Source: Created by Raymond James using Ibbotson Presentation Materials 2011 Morningstar. All Rights Reserved. 3/1/2011 Used with permission. TYPES OF ASSET CLASSES Stocks
More informationWith interest rates at historically low levels, and the U.S. economy showing continued strength,
Managing Interest Rate Risk in Your Bond Holdings THE RIGHT STRATEGY MAY HELP FIXED INCOME PORTFOLIOS DURING PERIODS OF RISING INTEREST RATES. With interest rates at historically low levels, and the U.S.
More informationFixed Income: The Hidden Risk of Indexing
MANNING & NAPIER ADVISORS, INC. Fixed Income: The Hidden Risk of Indexing Unless otherwise noted, all figures are based in USD. Fixed income markets in the U.S. are vast. At roughly twice the size of domestic
More informationThe Case for a Custom Fixed Income Benchmark. ssga.com/definedcontribution REFINING THE AGG
The Case for a Custom Fixed Income Benchmark ssga.com/definedcontribution REFINING THE AGG For decades, the Barclays US Aggregate Index (the Agg ) has been a popular benchmark for core bond investment
More informationRethinking fixed income. By Trevor t. Oliver
12 Rethinking fixed income By Trevor t. Oliver Summer/Fall 2012 The Participant : Issue 02 ssga.com/dc/theparticipant 13 The landscape for this asset class has changed. Our approach should too. Investors
More informationFixed Income 2015 Update. Kathy Jones, Senior Vice President Chief Fixed Income Strategist, Schwab Center for Financial Research
Fixed Income 2015 Update Kathy Jones, Senior Vice President Chief Fixed Income Strategist, Schwab Center for Financial Research 1 Fed: Slow and Low 2015 Fixed Income Outlook 2 Yield Curve Flattening 3
More informationSix Strategies for Volatile Markets When markets get choppy, it pays to have a plan for your investments, and to stick to it.
Six Strategies for Volatile Markets When markets get choppy, it pays to have a plan for your investments, and to stick to it. Fidelity Viewpoints 8/22/15 The markets have become volatile again, prompted
More informationBond Snapshot with Kathy Jones The Year of the Taper
Bond Snapshot with Kathy Jones The Year of the Taper Kathy Jones, Vice President Fixed Income Strategist Schwab Center for Financial Research February 2014 Overview of Topics Tapering Implications Where
More informationABF PAN ASIA BOND INDEX FUND An ETF listed on the Stock Exchange of Hong Kong
Important Risk Disclosure for PAIF: ABF Pan Asia Bond Index Fund ( PAIF ) is an exchange traded bond fund which seeks to provide investment returns that corresponds closely to the total return of the Markit
More informationNPH Fixed Income Research Update. Bob Downing, CFA. NPH Senior Investment & Due Diligence Analyst
White Paper: NPH Fixed Income Research Update Authored By: Bob Downing, CFA NPH Senior Investment & Due Diligence Analyst National Planning Holdings, Inc. Due Diligence Department National Planning Holdings,
More informationGuide to mutual fund investing. Start with the basics
Guide to mutual fund investing Start with the basics Pursue your financial goals Why do you invest? For a rainy day? A secure retirement? Funding a college tuition? Having a specific goal in mind will
More informationFixed Income Investing: What s an Investor to Do?
INSIGHTS Fixed Income Investing: What s an Investor to Do? July 2012 203.621.1700 2012, Rocaton Investment Advisors, LLC Executive Summary As interest rates have fallen steadily over the past 20 years,
More informationCALVERT UNCONSTRAINED BOND FUND A More Expansive Approach to Fixed-Income Investing
CALVERT UNCONSTRAINED BOND FUND A More Expansive Approach to Fixed-Income Investing A Challenging Environment for Investors MOVING BEYOND TRADITIONAL FIXED-INCOME INVESTING ALONE For many advisors and
More informationTimely Topics. The Benchmark Standard. May 30, 2013. Highlights. What Is a Benchmark, and Why Is It Important? LPL FINANCIAL RESEARCH
LPL FINANCIAL RESEARCH Timely Topics May 30, 2013 The Benchmark Standard Highlights LPL Financial Research believes investors need to choose a benchmark that best reflects the investment style of their
More informationGLOSSARY OF INVESTMENT-RELATED TERMS FOR NATIONAL ELECTRICAL ANNUITY PLAN PARTICIPANTS
GLOSSARY OF INVESTMENT-RELATED TERMS FOR NATIONAL ELECTRICAL ANNUITY PLAN PARTICIPANTS General Information This Glossary of Investment-Related Terms for National Electrical Annuity Plan Participants (the
More informationREIT QUICK FACTS GUIDE
REIT QUICK FACTS GUIDE FOR FINANCIAL ADVISORS Guidelines for Strategic Portfolio Diversification FINRA-Reviewed Fact Sheets on Stock Exchange-Listed Equity REITs Additional References for Advisors THERE
More informationThe Coming Volatility
The Coming Volatility Lowell Bolken, CFA Vice President and Portfolio Manager Real estate Securities June 18, 2015 www.advantuscapital.com S&P 500 Percent Daily Change in Price September 2008 to April
More informationModernizing Portfolio Theory & The Liquid Endowment UMA
Modernizing Portfolio Theory & The Liquid Endowment UMA Michael Featherman, CFA Director of Portfolio Strategies November 2012 Modern Portfolio Theory Definition and Key Concept Modern Portfolio Theory
More informationMML SERIES INVESTMENT FUND
This Prospectus describes the following Funds. MML SERIES INVESTMENT FUND MML Money Market Fund seeks to maximize current income, preserve capital and maintain liquidity by investing in money market instruments.
More informationT. Rowe Price Target Retirement 2030 Fund Advisor Class
T. Rowe Price Target Retirement 2030 Fund Advisor Class Supplement to Summary Prospectus Dated October 1, 2015 Effective February 1, 2016, the T. Rowe Price Mid-Cap Index Fund and the T. Rowe Price Small-Cap
More informationNavellier Tactical U.S. Equity Sector Plus
Navellier Tactical U.S. Equity Sector Plus B-063014/NCD-14-846 www.navellier.com Tactical Series 1 U.S. Equity Sector Plus Navellier Tactical U.S. Equity Sector Plus Model a hypothetical example Hypothetical
More informationHIGH QUALITY PREMIER OUR PHILOSOPHY THE ATTRIBUTES OUR APPROACH
HIGH QUALITY PREMIER September 30, 2015 (3Q) FACT SHEET OUR PHILOSOPHY We believe that securities with stable and predictable cash flows, and low credit and event risk produce consistent returns while
More informationBlackRock Diversified Income Portfolio. A portfolio from Fidelity Investments designed to seek income while managing risk
BlackRock Diversified Income Portfolio A portfolio from Fidelity Investments designed to seek income while managing risk Fidelity Investments has formed a strategic alliance with BlackRock Investment Management,
More informationCOMMUNITY FOUNDATION OF GREATER MEMPHIS, INC. INVESTMENT GUIDELINES FOR MONEY MARKET POOL
INVESTMENT GUIDELINES FOR MONEY MARKET POOL discretionary Money Market Pool is expected to pursue their stated investment strategy and follow the investment guidelines and objectives set forth herein.
More informationRetirement Balanced Fund
SUMMARY PROSPECTUS TRRIX October 1, 2015 T. Rowe Price Retirement Balanced Fund A fund designed for retired investors seeking capital growth and income through investments in a combination of T. Rowe Price
More informationGlossary of Investment Terms
online report consulting group Glossary of Investment Terms glossary of terms actively managed investment Relies on the expertise of a portfolio manager to choose the investment s holdings in an attempt
More informationBOND ALERT. What Investors Should Know. July 2013 WWW.LONGVIEWCPTL.COM 2 MILL ROAD, SUITE 105
BOND ALERT July 2013 What Investors Should Know This special report will help you understand the current environment for bonds and discuss how that environment may change with rising interest rates. We
More informationHSBC World Selection Funds April 30, 2016. Monthly Factsheets Class A and C Shares. Investment products: ARE NOT A BANK ARE NOT DEPOSIT OR
HSBC World Selection Funds April 30, 2016 Monthly Factsheets Class A and C Shares Aggressive Strategy Fund Balanced Strategy Fund Moderate Strategy Fund Conservative Strategy Fund Income Strategy Fund
More informationNavigator Fixed Income Total Return
CCM-15-12-1 As of 12/31/2015 Navigator Fixed Income Navigate Fixed Income with a Tactical Approach With yields hovering at historic lows, bond portfolios could decline if interest rates rise. But income
More informationWhy Consider Bank Loan Investing?
Why Consider Bank Loan Investing? September 2012 Bank loans continue to increase in popularity among a variety of investors in search of higher yield potential than other types of bonds, with lower relative
More informationSchwab Target Funds. Go paperless today. Simplify your financial life by viewing these documents online. Sign up at schwab.
Annual report dated October 31, 2015, enclosed. Schwab Target Funds Schwab Target 2010 Fund Schwab Target 2015 Fund Schwab Target 2020 Fund Schwab Target 2025 Fund Schwab Target 2030 Fund Schwab Target
More informationThe essentials of investing for retirement.
The essentials of investing for retirement. Fidelity has been helping people invest for retirement for more than 65 years. Some investors use our actively managed and index mutual funds. Some use our powerful
More informationExchange Traded Funds
LPL FINANCIAL RESEARCH Exchange Traded Funds February 16, 2012 What They Are, What Sets Them Apart, and What to Consider When Choosing Them Overview 1. What is an ETF? 2. What Sets Them Apart? 3. How Are
More informationObjective: Avoiding Market Declines*
INVESTOR PRESENTATION DYNAMIC FIXED INCOME PORTFOLIOS Objective: Avoiding Market Declines* Toews 1750 Zion Road, Suite 201 Northfield, NJ 08225 TL (877) 863-9726 www.toewscorp.com *There can be no assurance
More informationPurer return and reduced volatility: Hedging currency risk in international-equity portfolios
Purer return and reduced volatility: Hedging currency risk in international-equity portfolios Currency-hedged exchange-traded funds (ETFs) may offer investors a compelling way to more precisely access
More informationSmartRetirement Mutual Fund Commentary
SmartRetirement Mutual Fund Commentary J.P.Morgan Asset Management 3 rd Quarter 2014 Performance Highlights SmartRetirement s Performance Objectives The JPMorgan SmartRetirement Mutual Funds are designed
More informationALLOCATION STRATEGIES A, C, & I SHARES PROSPECTUS August 1, 2015
ALLOCATION STRATEGIES A, C, & I SHARES PROSPECTUS August 1, 2015 Investment Adviser: RidgeWorth Investments A Shares C Shares I Shares Aggressive Growth Allocation Strategy SLAAX CLVLX CVMGX Conservative
More informationNorthCoast Investment Advisory Team 203.532.7000 info@northcoastam.com
NorthCoast Investment Advisory Team 203.532.7000 info@northcoastam.com NORTHCOAST ASSET MANAGEMENT An established leader in the field of tactical investment management, specializing in quantitative research
More informationClass / Ticker Symbol Fund Name Class A Class C Class C1 Class I
Mutual Funds Prospectus August 31, 2011 Nuveen Municipal Bond Funds Dependable, tax-free income because it s not what you earn, it s what you keep. Class / Ticker Symbol Fund Name Class A Class C Class
More informationWHAT ROLE DO BONDS PLAY IN YOUR PORTFOLIO? Guard Against Interest Rate Risk and Credit Events
RETHINK YOUR BONDS Building Better Bond Portfolios Interest rates may inch up this year, but expect them to be low for some time to come. You can continue to achieve your fixed income goals in this environment
More informationUnconstrained Fixed Income
Unconstrained Fixed Income A Dynamic and Flexible Approach to Fixed Income Investing 26th ANNUAL TEXPERS CONFERENCE Global Fixed Income & Liquidity Management March 2015 This material is provided for educational
More informationUnderstanding Fixed Income Returns: Past, Present and Future by Stephen Kroah,CFA
Understanding Fixed Income Returns: Past, Present and Future by Stephen Kroah,CFA In today s economic environment, much discussion is centered around the impact of rising interest rates on fixed income
More informationChapter 12. Page 1. Bonds: Analysis and Strategy. Learning Objectives. INVESTMENTS: Analysis and Management Second Canadian Edition
INVESTMENTS: Analysis and Management Second Canadian Edition W. Sean Cleary Charles P. Jones Chapter 12 Bonds: Analysis and Strategy Learning Objectives Explain why investors buy bonds. Discuss major considerations
More informationHillswick Asset Management, LLC Core Fixed Income Composite
Year End (Millions) USD (Millions) Assets Number of Accounts Hillswick Asset Management, LLC Core Fixed Income Gross Aggregate Gov't/Credit Dispersion Barclays Capital Aggregate Gov't/Credit 2014 1,372
More informationBALANCED fund. Fourth Quarter Results FOCUSED INVESTING FOR THE LONG-TERM. December 31, 2015
BALANCED fund Fourth Quarter Results December 31, 2015 FOCUSED INVESTING FOR THE LONG-TERM BALANCED fund (MAPOX) Fourth Quarter Market Overview - December 31, 2015 Investors facing growing uncertainty
More informationNon-FDIC Insured May Lose Value No Bank Guarantee. Time-Tested Investment Strategies for the Long Term
Non-FDIC Insured May Lose Value No Bank Guarantee Time-Tested Investment Strategies for the Long Term Rely on These Four Time-Tested Strategies to Keep You on Course. Buy Right and Sit Tight Keep Your
More informationThe Search for Yield Continues: A Re-introduction to Bank Loans
INSIGHTS The Search for Yield Continues: A Re-introduction to Bank Loans 203.621.1700 2013, Rocaton Investment Advisors, LLC Executive Summary With the Federal Reserve pledging to stick to its zero interest-rate
More informationNavigating Rising Rates with Active, Multi-Sector Fixed Income Management
Navigating Rising Rates with Active, Multi-Sector Fixed Income Management With bond yields near 6-year lows and expected to rise, U.S. core bond investors are increasingly questioning how to mitigate interest
More information30% 5% of fixed income mutual funds paid capital gains in 2015
FIXED INCOME ETFs: NEW ASSET CLASS, SAME BENEFITS Exchange Traded Funds ( ETFs ) first appealed to equity investors, providing efficient access to the world s stock markets and they have revolutionized
More informationChanges to the OklahomaDream 529 Plan
Supplement dated December 31, 2015 to Oklahoma Dream Advisor Sold 529 Program Plan Disclosure Statement for Investors Using a Financial Advisor (Classes A and C) Dated November 3, 2014 This Supplement
More information9/30/81: 15.84% Real yield average: 2.46% Real 10-year Treasury yield 12/31/15: 0.25% -5% 58 63 68 73 78 83 88 93 98 03 08 13
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE INVESTMENT INSIGHTS Building better fixed income portfolios 1Q 2016 PLEASE VISIT jpmorganfunds.com for access to all of our Insights publications. Get
More informationBond Fund Investing in a Rising Rate Environment
MUTUAL FUND RESEARCH Danette Szakaly Ext. 71937 Date Issued: 1/14/11 Fund Investing in a Rising Rate Environment The recent rise in U.S. Treasury bond yields has some investors wondering how to manage
More informationFixed Income in a Rising Rate Environment
Fixed Income in a Rising Rate Environment Market Commentary May 2016 SINCE THE FIRST FEDERAL FUNDS RATE INCREASE IN DECEMBER 2015, interest rates have generally declined. This counterintuitive result underscores
More informationNavigator Fixed Income Total Return
CCM-15-08-1 As of 8/31/2015 Navigator Fixed Income Total Return Navigate Fixed Income with a Tactical Approach With yields hovering at historic lows, bond portfolios could decline if interest rates rise.
More informationTime to Invest in Short-Term Bonds?
First Quarter 2010 Time to Invest in Short-Term Bonds? Executive Summary This paper outlines why now may be an opportune time to invest in short-term bonds. We believe short-term bonds offer: Less downside
More informationPrinciples for investment success. We believe you will give yourself the best chance of investment success if you focus on what you can control
Principles for investment success We believe you will give yourself the best chance of investment success if you focus on what you can control Important information This guide has been produced for educational
More informationIs it time to hire a professional to manage your bonds?
Is it time to hire a professional to manage your bonds? Today s bond markets are more complex Finding the right bonds can be difficult. The bond markets are large and complex, and it takes a lot of homework
More informationFIXED INCOME INVESTORS HAVE OPTIONS TO INCREASE RETURNS, LOWER RISK
1 FIXED INCOME INVESTORS HAVE OPTIONS TO INCREASE RETURNS, LOWER RISK By Michael McMurray, CFA Senior Consultant As all investors are aware, fixed income yields and overall returns generally have been
More informationInvestment Funds Description
Investment Funds Description As of January 1, 2016 (Containing performance and other information as of December 31, 2015 unless otherwise noted) Short Term Investment Fund Stable Value Fund Inflation Protection
More informationUnit Investment Trusts
a guide to Unit Investment Trusts A unit investment trust (UIT) is a registered investment company that buys and holds a generally fixed portfolio of stocks, bonds, or other securities. Table of Contents
More informationAn Overview of the US Closed-End Fund Market. By Paul Mazzilli
An Overview of the US Closed-End Fund Market By Paul Mazzilli Introduction Closed-end funds (CEFs) are professionally managed investment companies that offer investors various unique benefits. They offer
More informationInstitutional Group Fixed Income for Nonprofits Strategies to consider in a rising rate, low return environment
Institutional Group Fixed Income for Nonprofits Strategies to consider in a rising rate, low return environment Following over 30 years of a secular bull market in bonds, the recent sharp rise in interest
More informationPurer return and reduced volatility: Hedging currency risk in international-equity portfolios
Purer return and reduced volatility: Hedging currency risk in international-equity portfolios Currency-hedged exchange-traded funds (ETFs) offer investors a compelling way to access international-equity
More informationEconomic & Market Outlook
Monthly Portfolio Commentary December 31, 2015 Economic & Market Outlook Stocks rebounded in 2015 s fourth quarter, but provided little reward for the year as a whole. The S&P 500 Index recovered from
More informationPOPULAR BOND INDEXES MAY CONTAIN SIGNIFICANT EXPOSURE TO NON-U.S. ISSUERS. Non-U.S. Exposure in the Most Popular Corporate Bond Indexes
WisdomTree ETFs STRATEGIC CORPORATE BOND FUND CRDT In the current market environment, investors have increasingly targeted corporate bonds 1 as one approach to enhance income in their portfolios. Through
More informationHow To Create A Low Correlation Portfolio
The Power of Low-Correlation Investing Wealth Strategies How to think about the core building blocks of your portfolio Smart Investing Begins with Planning Effective investment planning is concrete problem-solving.
More informationBalanced Fund RPBAX. T. Rowe Price SUMMARY PROSPECTUS
SUMMARY PROSPECTUS RPBAX May 1, 2016 T. Rowe Price Balanced Fund A fund seeking capital growth and current income through a portfolio of approximately 65% stocks and 35% fixed income securities. Before
More informationInvestment Implications for UK DC Schemes in Light of Tax and Regulatory Changes
Investment Implications for UK DC Schemes in Light of Tax and Regulatory Changes November 19, 2014 by William Allport of PIMCO With greater flexibility and choices available to DC savers in the latter
More informationThe recent volatility of high-yield bonds: Spreads widen though fundamentals stay strong
Investment Insights The recent volatility of high-yield bonds: Spreads widen though fundamentals stay strong Kevin Lorenz, CFA, Managing Director, Lead Portfolio Manager of TIAA-CREF's High-Yield Fund
More informationWhy own bonds when yields are low?
Why own bonds when yields are low? Vanguard research November 213 Executive summary. Given the backdrop of low yields in government bond markets across much of the developed world, many investors may be
More informationBasic Investment Education
Disclaimer: The information provided below is for information purposes only - it is not investment advice. If you have any questions about your own personal financial situation, you should consult with
More informationTaxable Fixed Income Outlook: Waiting for Those Rising Rates
Taxable Fixed Income Outlook: Waiting for Those Rising Rates Market Commentary Fourth quarter 2014 MOST INVESTORS UNDERSTAND THAT INTEREST RATES ARE UNPREDICTABLE. But we suspect few believed rates could
More informationPRINCIPAL TRUST TARGET DATE FUNDS SUMMARY
Date Collective Investment s PRINCIPAL TRUST TARGET DATE FUNDS SUMMARY The date of this summary is October 28, 2015 This summary includes key information about the Trust Date Collective Investment s (each
More informationEvolving your fixed income strategy
Evolving your fixed income strategy 3Q 2015 INVESTMENT INSIGHTS NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE PLEASE VISIT jpmorganfunds.com for access to all of our Insights publications. Opportunities
More informationCHOOSING YOUR INVESTMENTS
CHOOSING YOUR INVESTMENTS FOR ASSISTANCE CONTACT US TODAY FOR MORE INFORMATION, ADVICE OR HELP OPENING AN ACCOUNT, IT S EASY TO REACH US: BY PHONE Call us at 800 TIAA-CREF (800 842-2273) to speak with
More informationBond Fund of the TIAA-CREF Life Funds
Summary Prospectus MAY 1, 2015 Bond Fund of the TIAA-CREF Life Funds Ticker: TLBDX Before you invest, you may want to review the Fund s prospectus, which contains more information about the Fund and its
More informationYield Curve September 2004
Yield Curve Basics The yield curve, a graph that depicts the relationship between bond yields and maturities, is an important tool in fixed-income investing. Investors use the yield curve as a reference
More informationSHORT DURATION BONDS
SHORT DURATION BONDS Our Short Duration Bond Fund range RL Short Duration Gilt Fund RL Short Duration Global Index Linked Bond Fund RL Short Duration Credit Fund RL Duration Hedged Credit Fund RL Short
More informationAssessing Risk Tolerance for Asset Allocation
Contributions Droms Assessing Risk Tolerance for Asset Allocation by William G. Droms, DBA, CFA, and Steven N. Strauss, CPA/PFS William G. Droms, DBA, CFA, is the Powers Professor of Finance in the McDonough
More informationBrown Advisory Strategic Bond Fund Class/Ticker: Institutional Shares / (Not Available for Sale)
Summary Prospectus October 30, 2015 Brown Advisory Strategic Bond Fund Class/Ticker: Institutional Shares / (Not Available for Sale) Before you invest, you may want to review the Fund s Prospectus, which
More informationPreparing Your Savings for Retirement
Preparing Your Savings for Retirement The Retirement Income Series Part 1: Preparing Your Savings for Retirement Identify sources of income, including Social Security Assess the impact of future health
More informationGlobal Bond Fund FAQ April 2016
April 2016 333 S. Grand Ave., 18th Floor Los Angeles, CA 90071 (213) 633-8200 1. What is the investment objective of the DoubleLine s Global Bond Fund? The DoubleLine Global Bond Fund seeks to generate
More informationSUMMARY PROSPECTUS. TCW High Yield Bond Fund FEBRUARY 29 I SHARE: TGHYX N SHARE: TGHNX
TCW High Yield Bond Fund I SHARE: TGHYX N SHARE: TGHNX 20 6 FEBRUARY 29 SUMMARY PROSPECTUS Before you invest, you may want to review the Fund s Prospectus which contain more information about the Fund
More informationSeeking a More Efficient Fixed Income Portfolio with Asia Bonds
Seeking a More Efficient Fixed Income Portfolio with Asia s Seeking a More Efficient Fixed Income Portfolio with Asia s Drawing upon different drivers for performance, Asia fixed income may improve risk-return
More informationBond Mutual Funds. a guide to. A bond mutual fund is an investment company. that pools money from shareholders and invests
a guide to Bond Mutual Funds A bond mutual fund is an investment company that pools money from shareholders and invests primarily in a diversified portfolio of bonds. Table of Contents What Is a Bond?...
More informationInterest Rates and Inflation: How They Might Affect Managed Futures
Faced with the prospect of potential declines in both bonds and equities, an allocation to managed futures may serve as an appealing diversifier to traditional strategies. HIGHLIGHTS Managed Futures have
More informationDiversify portfolios with U.S. and international bonds
Diversify portfolios with U.S. and international bonds Investing broadly across asset classes such as stocks, bonds and cash can help reduce volatility and risk within a portfolio. Canadian investors have
More informationBond Investing in a Rising Rate Environment
September 3 W H I T E PA P E R Bond Investing in a Rising Rate Environment Contents Yields Past, Present and Future Allocation and Mandate Revisited Benchmark Comparisons Investment Options to Consider
More informationRisk Control and Equity Upside: The Merits of Convertible Bonds for an Insurance Portfolio
Risk Control and Equity Upside: The Merits of Convertible Bonds for an Insurance Portfolio In a survey of insurance company Chief Investment Officers conducted by Eager, Davis & Holmes 1 in May 2009, 43%
More informationReducing bonds? Proceed with caution
Reducing? Proceed with caution Vanguard research April 2013 Executive summary. Historically low yields from U.S. and recent cautions in the media about a potential bond bubble have led many investors to
More informationSankaty Advisors, LLC
Leveraged Loans: A Primer December 2012 In today s market environment of low rates and slow growth, we believe that leveraged loans offer a unique diversification option for fixed income portfolios due
More informationFLOATING RATE BANK LOANS: A BREAK FROM TRADITION FOR INCOME-SEEKING INVESTORS. Why does the bank loan sector remain so attractive?
FLOATING RATE BANK LOANS: A BREAK FROM TRADITION FOR INCOME-SEEKING INVESTORS Bank loans present a compelling income opportunity and a portfolio diversifier that provides protection against traditional
More informationState Street Target Retirement Funds - Class K
The State Street Target Retirement Funds - Class K (the "Funds") represent units of ownership in the State Street Target Retirement Non-Lending Series Funds. The Funds seek to offer complete, low cost
More informationGenerate More Efficient Income and a Stronger Portfolio
Generate More Efficient Income and a Stronger Portfolio All examples shown are hypothetical and for illustrative purposes only and do not represent the performance of an actual investment. Past performance
More informationLearn how your financial advisor adds value. Investor education
Learn how your financial advisor adds value Investor education The value of partnership Many people find it difficult to invest on their own, particularly as they amass wealth and their financial situations
More informationNew York's 529 Advisor-Guided College Savings Program
New York's 529 Advisor-Guided College Savings Program yr AVERAGE TOTAL Expense ratio AGE-BASED PORTFOLIOS JPMorgan 529 Aggressive Age-Based Portfolio (Age 0-5) 2,3,4,5,6,7,8,9,37 Class A - 5/4/202, 5705,
More informationHow to manage your fixed-income investments when interest rates rise
How to manage your fixed-income investments when interest rates rise April 2015 Begin by taking a thoughtful approach. Consider total return and not just current yields. Make sure you maintain portfolio-wide
More informationInvesting. Mutual Fund. ABC Company 123 Main Street Anywhere, USA 12345 www.sampleabccompany.com 800.123.4567
Mutual Fund Investing Your promotional imprint here and/or back cover. ABC Company 123 Main Street Anywhere, USA 12345 www.sampleabccompany.com 800.123.4567 Mutual funds are one of the most popular ways
More informationThoughtCapital. Investment Strength and Flexibility
Investment Strength and Flexibility Principal Trust SM Target Date Funds The Principal Trust SM Target Date Funds (Target Date Funds) are designed to capitalize on the growing popularity of Do-It-For-Me
More information