Taxable Fixed Income Outlook: Waiting for Those Rising Rates
|
|
- Ralph Harper
- 8 years ago
- Views:
Transcription
1 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 actually fall in the fourth quarter. While the recent decline highlights the uncertainty of rates, we are undoubtedly approaching the day when the Fed will begin increasing the fed funds rate. Given this quandary, how should investors position their portfolios? We believe broadly flexible, multi-sector strategies that allow active managers latitude are best suited for an uncertain rate environment. How Fast and How Much? While much has been made about when the Federal Reserve (Fed) will begin raising rates, there has been little discussion about what happens afterward. Investors should be asking two central questions: How fast will rates rise? How much will they rise? Different rising rate environments affect fixed income assets in significantly different ways. A sharp increase in rates over a short period of time can result in negative fixed income returns. Conversely, incremental increases over a longer time frame may have less impact. We believe that rate increases during this cycle are more likely to be slow and incremental due to fundamental and technical factors that have been keeping rates relatively low and may mitigate future rate increases. Tony Rodriguez Co-Head of Fixed Income Nuveen Asset Management, LLC Exhibit 1: Factors May Persist That Have Suppressed Rates Fundamental Factors Economic Growth U.S. growing at only moderate pace Europe and Japan slowing Inflation Remains contained Low wage growth despite falling unemployment Falling commodity prices Monetary Policy Fed remains cautious Foreign central banks easing Technical Factors Global Capital Flows U.S. rates remain higher than those of other developed countries, driving demand Investor Positioning Persistent investor short duration positions cap upward rate movements Geopolitical Risks Cause periodic flight to quality in U.S. Treasuries Paul Blomgren Senior Vice President, Client Portfolio Manager Nuveen Asset Management, LLC We believe many of these factors may persist, muting some of the effects of Fed rate hikes. We anticipate that the mixed nature of the fundamental factors will allow the Fed to be very patient. Unwinding of policy accommodation will be measured based on clear signals in economic data and is more likely to be too slow than too fast. We expect the 10-year U.S. Treasury yield to be in the 2.75% area at the end of See page 5 for Our Favorite Things in the current bond market. NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
2 Focus on Income Generation Historically, nearly 93% of the total return of the bond market has been generated by income versus rate changes or other factors. The prospect of a slowly rising rate environment makes income even more critical. Income can help: Build total return before rates increase Cushion total return from the negative price impact of rate increases Augment total return in periods with minimal rate movements Exhibit 2: Income Has Generated the Majority of Total Return Percent of Total Return Generated by Income 100% 80% 60% 40% 20% 0% Total Return 83.8% 12/31/09-12/31/14 1/30/76-12/31/14 Barclay s Aggregate Bond Index 92.7% 89.5% 94.7% 12/31/09-12/31/14 1/31/93-12/31/14 Barclay s U.S. High Yield 2% Issuer Capped Index 4.5% 7.9% 9.0% 8.0% Data Source: Barclays. Data as of 12/31/14. Chart shows the percent of annualized total return derived from coupon return (as opposed to price appreciation). The Barclays Aggregate Bond Index has an inception date of 1/1/76. The Barclays U.S. High Yield 2% Issuer Capped Index has an inception date of 1/1/93. The index returns presented are for illustration purposes only and do not represent or predict performance of any Nuveen Investments product. Indices are unmanaged and unavailable for direct investment. Past performance is no guarantee of future results. Finding Attractive Income Opportunities When searching the universe for income, we continue to prefer the non-government related segments of the bond market, which offer: Higher yield and income potential Return potential from changes in yield spread over Treasuries Yield spreads are generally wider now than earlier in 2014, offering more opportunity for price improvement if economic conditions continue to improve. This can help offset the impact of rising rates. Exhibit 3: Non-Government Related Sectors Have Offered Higher Yields Yield 8% 6.61% 6% 4.64% 4% 3.11% 5.66% 2% 1.43% 0% Treasuries Investment Grade Preferred Securities High Yield Emerging Market Debt Source: Barclays. Data as of 12/31/14. Treasuries represented by the Barclays U.S. Treasury Index.; Investment Grade represented by Barclays U.S. Corporate Investment Grade Index; Preferred Securities represented by BofA Merrill Lynch U.S. Preferred Stock Fixed Rate Index; High Yield represented by Barclays U.S. Corporate High Yield 2% Issuer Capped Index; Emerging Markets represented by Barclays Emerging Market USD Aggregate Index. Past performance is no guarantee of future results. Indices are unmanaged and unavailable for direct investment. 2
3 Less Sensitivity to Rate Changes Non-government sectors have higher yields and potential for spread compression, so they have been less sensitive to interest rate changes. Exhibit 4 shows the correlation between these sectors and the 10-Year U.S. Treasury yield. Note how these sectors have much less sensitivity to rising rates than the overall bond market. Exhibit 4: Non-Government Sectors Have Lower Correlation to 10-Year Treasury Yields Correlation to U.S. Treasuries Broad Bond Market 0.45 Investment Grade 0.05 Preferred Securities High Yield 0.18 Emerging Market Debt Source: Morningstar Direct. Correlations from 11/1/04 to 12/31/ Year U.S. Treasury Returns represented by the Barclays U.S. Treasury Bellwethers 10-Year Index.; Investment Grade represented by Barclays U.S. Corporate Investment Grade Index; Preferred Securities represented by BofA Merrill Lynch U.S. Preferred Stock Fixed Rate Index; High Yield represented by Barclays U.S. Corporate High Yield 2% Issuer Capped Index; Emerging Markets represented by Barclays Emerging Market USD Aggregate Index. Correlation measures how two securities move in relation to each other. Perfect positive correlation (+1) implies the securities will move in the same direction. Perfect negative correlation (-1) means the securities will move in the opposite direction. If the correlation is 0, the movements of the securities are said to have no correlation; they are completely random. Past performance is no guarantee of future results. Indices are unmanaged and unavailable for direct investment. Use Active Management to Adapt to Changing Rate Environments Designing a portfolio to perform in a rising rate environment requires more than selecting the highest yielding sectors. Yields, risks and relative attractiveness can vary substantially and change rapidly as conditions evolve. As the market cycle unfolds, returns are driven less by overall sector exposure and more by individual securities. Identifying solid credit stories requires diligent fundamental research. Balancing portfolio risks across sectors and security types generally necessitates professional management. In this changing environment, we like strategies that offer the flexibility to invest across market segments and provide access to the higher yielding, below investment grade sectors. These strategies, among others, have the potential to reduce portfolio sensitivity to rising rates and capitalize on opportunities in uncertain times. 3
4 Outlook: Modestly Rising Rates Amid Continued Growth We believe three themes will drive the broad market: RATES WILL RISE MODESTLY BUT REMAIN AT RELATIVELY LOW LEVELS. We expect the Fed will begin tightening policy in mid Given low inflation and moderate U.S. growth, we believe the process will be very deliberate, which is important to ensuring that financial markets do not overreact. Although we don t expect a dramatic uninterrupted rise in yields, interest rate volatility could occasionally spike in response to economic or geopolitical developments, or to renewed uncertainty about the Fed. We expect rates to rise gradually and the yield curve to continue to flatten, with short rates rising more than long rates. We estimate that the 10-year U.S. Treasury yield will settle around 2.75% by year-end DOMESTIC ECONOMIC RECOVERY CONTINUES. We remain fairly constructive on U.S. growth fundamentals and believe that the United States will continue to decouple from weak global growth. Job growth remains strong, manufacturing surveys remain consistent with moderate growth, business capital spending should remain supportive and consumer spending has rebounded in response to growth in disposable income from lower energy costs. Lower oil prices though certainly worrisome for highly levered, energy-related companies and weaker oil-exporting sovereign credits will likely be a net positive for the U.S. economy. Though we are starting to see early signs of tightening in labor markets, inflation should remain subdued and well below the Fed s 2% target in the short run, especially given broad commodity and energy price weakness. We believe U.S. growth will be around 3% in WE REMAIN FAIRLY CONSTRUCTIVE on U.S. growth fundamentals and believe that the United States will continue to decouple from weak global growth. GLOBAL GROWTH DIVERGES. European growth has deteriorated while the U.S. recovery remains intact. We believe the United States will continue to lead global growth, which will likely remain muted. Inflation remains low globally, with continued economic slack and declining commodity prices. While the Fed is reducing monetary accommodation, the European Central Bank is facing deflation and will likely begin a quantitative easing program this year. The Japanese economy continues to be sluggish, but additional supportive fiscal and monetary measures should help. China s growth has slowed, but policy makers have responded with measures we believe will be sufficient to maintain a near 7% growth target this year. The sharp decline in oil has been disruptive in the short run and will pressure some countries, but it is broadly positive for global growth and containing inflation. We believe that global GDP growth may exceed 3.0% in These divergent conditions will help to moderate the global cycle, control inflation and likely remain supportive of emerging markets. Although countries that depend on commodity exports will continue to face headwinds, cheaper currencies, global stimulus and U.S. growth will help emerging markets. Last quarter s selloff has created attractive valuations in some segments of emerging markets for patient investors. Investing in the right countries is critical for success. 4
5 Our Favorite Things Against this backdrop, we continue to favor the non-u.s. government-related asset classes, including: Selected investment grade corporates High yield corporates Selected foreign markets Preferred securities CORPORATE BONDS are attractive, both investment grade and high yield with intermediate durations. Credit fundamentals, though having softened modestly, remain solid and are fully supported by current risk premiums. The recent cheapening of credit has increased the attractiveness of the corporate sectors. Given near-term uncertainty in oil prices, we see continued volatility in credit spreads but ultimately expect them to tighten as energy prices stabilize. Strong fundamental analysis should be rewarded as most credits will successfully weather this near-term volatility. We also believe we have transitioned to a more selective environment, where issue and credit selection will be the primary drivers of performance. WE EXPECT MODEST SPREAD TIGHTENING over the year as investor confidence returns, especially if oil prices stabilize or begin to recover. We think the financial sector is attractive due to improving balance sheets at large financial institutions as regulation increases. We also are finding good value in selected cyclicals. Within investment grade, we prefer BBB-rated over A-rated industrials because of better relative value, generally lower rate sensitivity and less risk of re-leveraging behavior in lower-rated credits. HIGH YIELD CORPORATE BONDS have the potential to generate significant income with moderate interest rate risk. During the fourth quarter, the precipitous drop in oil prices and net outflows weighed on the sector. The sector is more exposed to the price of oil than other markets because approximately 14% of common high yield indices consist of energy-related credits. While we continue to be cautious near-term on energy credits, we believe the sector has been oversold and diligent credit research can uncover attractive long-term opportunities. Credit work is critical in this sector because of the challenges posed by lower oil prices and changing supply dynamics. The fundamentals of the high yield sector outside of energy remain strong. Some sectors are expected to benefit from lower energy prices. Solid economic growth and healthy earnings outside of energy still signal a benign default environment over the coming year--even though a small group of energy-related credits may have increased default risk. The global default rate held steady at 2.2% in November, down from 2.9% at this time last year and well below the long-term historical average of 4.7%. Looking ahead, Moody s default rate forecasting model predicts that the global default rate will edge up slightly to 2.6% by the end of This outlook is supported by low refinancing risk as many companies have enjoyed easy access to the debt market, pushing out refinancing needs and lowering debt costs. 1 Source: Moody s. December
6 In addition, wider credit spreads (over 500 basis points at yearend 2 ) have created an attractive entry point for the high yield asset class. We expect modest spread tightening over the year as investor confidence returns, especially if oil prices stabilize or begin to recover. The current yield of 6.61% can also cushion returns from the expected modest rate increases. 2 The higher income potential makes the sector more attractive going forward as continued low yields in the broader fixed income markets drive investor demand for higher yielding assets. SELECTED FOREIGN MARKETS can offer value. We prefer countries with better growth prospects, sound monetary policies or attractive interest rates. In addition, these investments diversify away from U.S. interest rates and the U.S. dollar. The path of global growth and differing domestic monetary and economic conditions will continue to drive valuations. European yields are likely to remain in check, even as U.S. yields rise. We also like selected emerging market corporate bonds and specific sovereign debt of countries whose policymakers have demonstrated sound policies to improve competitiveness, promote structural reforms and enhance fiscal and monetary credibility, such as Mexico and Poland. The U.S. dollar is likely to further benefit from continued U.S. economic improvement and growth, but individual currency performance will vary based on local fundamentals. We are negative on the yen and euro, given the widening gap in economic fundamentals and policy objectives. PREFERRED SECURITIES can also be attractive for both yield and diversification. These hybrid securities tend to trade inefficiently, so they may benefit from active, professional management. In addition, the changing bank regulatory environment creates opportunities. We favor the fixed-to-floating rate coupon structures, which mitigate the risk of increasing interest rate sensitivity as rates rise. 2 Source: Barclays. Based on Barclays High Yield 2% Issuer Capped Index as of 12/31/14. For more information, please consult with your financial advisor and visit nuveen.com. INDEX DEFINITIONS Barclays Emerging Market USD Aggregate Index includes USD-denominated debt from emerging markets around the world. Barclays U.S. Aggregate Index 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. Barclays U.S. Corporate Investment Grade Index is a broad-based benchmark that measures the investment grade, fixed-rate, taxable corporate bond market. Barclays U.S. High Yield 2% Issuer Capped Index tracks the performance of U.S. noninvestment-grade bonds and limits each issue to 2% of the index. Barclays U.S. Treasury Bellwethers 10-Year Index is a universe of Treasury bonds, and used as a benchmark against the market for long-term maturity fixed-income securities. The index assumes reinvestment of all distributions and interest payments. Barclays U.S. Treasury Index includes public obligations of the U.S. Treasury. Treasury bills are excluded by the maturity constraint but are part of a separate Short Treasury Index. In addition, certain special issues, such as state and local government series bonds (SLGs), as well as U.S. Treasury TIPS, are excluded. STRIPS are excluded from the index because their inclusion would result in double-counting. BofA Merrill Lynch Preferred Stock Fixed Rate Index is designed to replicate the total return of a diversified group of investment-grade preferred securities. RISKS AND OTHER IMPORTANT CONSIDERATIONS Investing involves risk; principal loss is possible. Debt or fixed income securities are subject to market risk, credit risk, interest rate risk, call risk, derivatives risk, dollar roll transaction risk and income risk. As interest rates rise, bond prices fall. Below investment grade or high yield debt securities are subject to liquidity risk and heightened credit risk. Preferred securities are subordinated to bonds and other debt instruments in a company s capital structure and therefore are subject to greater credit risk. Foreign investments involve additional risks, including currency fluctuation, political and economic instability, lack of liquidity and differing legal and accounting standards. Asset-backed and mortgage-backed securities are subject to additional risks such as prepayment risk, liquidity risk, default risk and adverse economic developments. This information represents the opinion of Nuveen Asset Management, LLC and is not intended to be a forecast of future events and this is no guarantee of any future result. It is not intended to provide specific advice and should not be considered investment advice of any kind. Information was obtained from third party sources which we believe to be reliable but are not guaranteed as to their accuracy or completeness. This report contains no recommendations to buy or sell specific securities or investment products. All investments carry a certain degree of risk, including possible loss of principal, and there is no assurance that an investment will provide positive performance over any period of time. It is important to review your investment objectives, risk tolerance and liquidity needs before choosing an investment style or manager. Nuveen Asset Management, LLC is a registered investment adviser and an affiliate of Nuveen Investments, Inc. GPE-TFICOM-1214D 5402-INV-Q04/15 Nuveen Investments 333 West Wacker Drive Chicago, IL nuveen.com
Fixed 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 informationFixed Income in a Rising Rate Environment
Fixed Income in a Rising Rate Environment With interest rates at historically low levels, fixed income investors have become increasingly concerned about rising rates and how their portfolios might be
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 informationBond Market Insights October 10, 2014
Bond Market Insights October 10, 2014 by John Simms, CFA and Jerry Wiesner, CFA General Bond Market Treasury yields rose in September as prices fell. Yields in the belly of the curve (5- to 7-year maturities)
More informationPioneer Bond Fund. Performance Analysis & Commentary September 2015. Fund Ticker Symbols: PIOBX (Class A); PICYX (Class Y) us.pioneerinvestments.
Pioneer Bond Fund COMMENTARY Performance Analysis & Commentary September 2015 Fund Ticker Symbols: PIOBX (Class A); PICYX (Class Y) us.pioneerinvestments.com Third Quarter Review Pioneer Bond Fund s Class
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 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 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 informationBOND MARKET PERSPECTIVES CROSSED WIRES KEY TAKEAWAYS LPL RESEARCH. June 23 2015 HAMMER FLAT: MIDYEAR BOND MARKET OUTLOOK
LPL RESEARCH BOND MARKET PERSPECTIVES KEY TAKEAWAYS We continue to expect roughly flat bond returns for 2015, as the choppy market environment witnessed over the first half of 2015 continues. The challenging,
More informationFund commentary. John Hancock Retirement Living Portfolios Q1 2016
John Hancock Retirement Living Portfolios Fund commentary Seek: Long-term growth of capital or a balance between a high level of current income and growth of capital Use for: Broadly diversified, risk-targeted
More informationWells Fargo Advantage Dow Jones Target Date Funds SM
Wells Fargo Advantage Dow Jones Target Date Funds SM Annual Report February 28, 2015 Wells Fargo Advantage Dow Jones Target Today Fund SM Wells Fargo Advantage Dow Jones Target 2010 Fund SM Wells Fargo
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 informationInvesting in a Rising Rate Environment
Investing in a Rising Rate Environment How Rising Interest Rates Affect Bond Portfolios By Baird s Private Wealth Management Research Summary With historically low interest rates and the unprecedented
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 informationFloating Rate Loans ( Senior Loans, Bank Loans, Leveraged Loans ) Senior (Unsecured) Debt Traditional Bonds, Convertible Bonds
The Case for Loans Market Commentary February 2016 WHAT ARE FLOATING RATE LOANS? Also commonly referred to as senior secured loans or bank loans, floating rate loans are made by large commercial or investment
More informationImpact of rising interest rates on preferred securities
Impact of rising interest rates on preferred securities This report looks at the risks preferred investors may face in a rising-interest-rate environment. We are currently in a period of historically low
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 informationto Wealth Management resources of one of the world s largest financial services firms. The Caribbean Group
A Defined Approach to Wealth Management Giving UWI access to the combined resources of one of the world s largest financial services firms. The Caribbean Group The information in this presentation is intended
More informationBond Outlook. Third Quarter 2014. Waiting on the Fed. 10-Year Treasury Yields. Treasury Bonds. Break-even Inflation Rate
Third Quarter 21 Waiting on the Fed Despite a strong rebound in domestic economic activity with gross domestic production accelerating toward %, persistent low inflationary pressures and dramatically lower
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 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 informationHow Smaller Stocks May Offer Larger Returns
Strategic Advisory Solutions April 2015 How Smaller Stocks May Offer Larger Returns In an environment where the US continues to be the growth engine of the developed world, investors may find opportunity
More informationIn Search of Yield. Actively Managed High Yield Bond Funds May Offer Long-Term Value
In Search of Yield Actively Managed High Yield Bond Funds May Offer Long-Term Value In Search of Yield The Case for Actively Managed High Yield Bond Funds CONTENTS 2 Losing Ground to Inflation: The Impact
More informationThe Fix Fixed income flashback: is history going to repeat?
December 2014 For professional investors only The Fix Fixed income flashback: is history going to repeat? Kellie Wood, Portfolio Manager, Fixed Income Traditional financial theory portends that bond prices
More informationTaxable Fixed Income. Invesco Floating Rate Fund (AFRAX)
Taxable Fixed Income Invesco Floating Rate Fund (AFRAX) Senior Secured Loans A unique asset class Floating rate funds, also called senior loan funds, invest in senior secured loans. The loans have very
More informationToday s bond market is riskier and more volatile than in several generations. As
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
More informationOpportunity in High Yield Bonds
Research Opportunity in High Yield Bonds 2016 Q1 Quarterly Commentary Weyland Capital Management LLC - 22 Deer Street - Portsmouth, New Hampshire 03801 p. 603.433.8994 www.weyland.com This document reflects
More informationBond Market Perspectives
LPL FINANCIAL RESEARCH Bond Market Perspectives October 1, 2013 Many Happy Returns Anthony Valeri, CFA Market Strategist LPL Financial Highlights September bond market performance saw gains across all
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 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 informationFixed Income Liquidity in a Rising Rate Environment
Fixed Income Liquidity in a Rising Rate Environment 2 Executive Summary Ò Fixed income market liquidity has declined, causing greater concern about prospective liquidity in a potential broad market sell-off
More informationNORTHERN TRUST ACTIVE FIXED INCOME QUARTERLY UPDATE. Core/Core Plus Investment Strategy
NORTHERN TRUST ACTIVE FIXED INCOME QUARTERLY UPDATE Core/Core Plus Investment Strategy December 31, 2014 Northern Trust Asset Management 50 South La Salle Street Chicago, Illinois 60603 northerntrust.com
More informationThe timeless (and timely) case for high-yield bonds
INCOME EATON VANCE Looking beyond traditional sources of yield MARCH 2016 TIMELY THINKING The timeless (and timely) case for high-yield bonds SUMMARY High-yield bonds occupy a special capital market niche:
More informationFixed-income opportunity: Short duration high yield
March 2014 Insights from: An income solution for a low or rising interest-rate environment Generating income is a key objective for many investors, and one that is increasingly difficult to achieve in
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 informationANY GAS LEFT IN THE HIGH-YIELD MUNICIPAL TANK?
May 9, 2016 ANY GAS LEFT IN THE HIGH-YIELD MUNICIPAL TANK? A favorable credit environment and technical factors have contributed to strong high-yield municipal performance. We see limited room for further
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 informationOpportunities in credit higher quality high-yield bonds
Highlights > > Default rates below the long-term average > > Valuations wide of historical average in BB and B rated credit > > Despite sluggish economy, high yield can still perform well > > High yield
More informationAmerican Funds Insurance Series. U.S. Government/ AAA-Rated Securities Fund. Summary prospectus Class 3 shares May 1, 2016
American Funds Insurance Series U.S. Government/ AAA-Rated Securities Fund Summary prospectus Class 3 shares May 1, 2016 Before you invest, you may want to review the fund s prospectus and statement of
More informationThe Risk of Fixed Income Indexing vs. Active Multi-Sector Management
Pioneer Perspectives TM May 2012 The Risk of Fixed Income Indexing vs. Active Multi-Sector Management A Different Future for Fixed Income Investors? Tepid economic growth coupled with volatile equity markets
More information2016 Investment Outlook
Prepared for Merrill Lynch 2016 Investment Outlook Presentation By: Robert C. Doll, CFA Senior Portfolio Manager Chief Equity Strategist Ten Predictions May 2016 NOT FDIC INSURED MAY LOSE VALUE NO BANK
More informationThe timeless (and timely) case for high-yield bonds
EATON VANCE TOPIC PAPER MAY 2016 The timeless (and timely) case for high-yield bonds Michael Weilheimer, CFA Director High-Yield Investments Steve Concannon Portfolio Manager High-Yield Investments Jeff
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 informationPioneer AMT-Free Municipal Fund
Pioneer AMT-Free Municipal Fund COMMENTARY Performance Analysis & Commentary September 2015 Fund Ticker Symbols: PBMFX (Class A); PBYMX (Class Y) us.pioneerinvestments.com Third Quarter Review Pioneer
More information2015 Mid-Year Market Review
2015 Mid-Year Market Review Cedar Hill Associates, LLC www.cedhill.com 6111 North River Road, Suite 1100, Rosemont, Illinois 60018 Phone: 312/445-2900 An Affiliate of MB Financial Bank 2015 Major Investment
More informationFund commentary. John Hancock Lifestyle Portfolios Q1 2016
Fund commentary John Hancock Lifestyle Portfolios Seek: Long-term growth of capital or a balance between a high level of current income and growth of capital Use for: Broadly diversified, risk-targeted
More informationFIXED INCOME STRATEGY HIGHLIGHTS OCTOBER, 2015
FIXED INCOME STRATEGY HIGHLIGHTS OCTOBER, 2015 IN BRIEF: The U.S. Fixed Income Markets During the third quarter, the U.S. economy showed continued progress coupled with a decline in the U.S. unemployment
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 informationManaging Risk/Reward in Fixed Income
INSIGHTS Managing Risk/Reward in Fixed Income Using Global Currency-Hedged Indices as Benchmarks In the pursuit of alpha, is it better to use a global hedged or unhedged index as a benchmark for measuring
More informationA Checklist for a Bond Market Sell-off
A Checklist for a Bond Market Sell-off New Zealand Fixed Income Monthly Commentary February 2013 Christian@harbourasset.co.nz +64 4 460 8309 Just like 2011 and 2012, the start of a new year has again prompted
More informationNORTHERN TRUST ACTIVE FIXED INCOME QUARTERLY UPDATE. Core/Core Plus Investment Strategy
NORTHERN TRUST ACTIVE FIXED INCOME QUARTERLY UPDATE Core/Core Plus Investment Strategy SUMMARY: The Northern Fixed Income Fund (NOFIX)*and Northern Core Bond Fund (NOCBX)** both received four-star overall
More informationHigh Yield Bonds: Income Potential in a World Starved for Yield
High Yield Bonds: Income Potential in a World Starved for Yield Q&A with the Portfolio Managers Class A: CPHYX Class C: CCHIX Class I: PHYTX Class P: PYHPX Mark Denkinger and Darrin Smith, Principal High
More informationNORTHERN TRUST HIGH YIELD FIXED INCOME QUARTERLY UPDATE. Highlighting attribution, economic and market analysis
NORTHERN TRUST HIGH YIELD FIXED INCOME QUARTERLY UPDATE Highlighting attribution, economic and market analysis December 31, 2015 Northern Trust Asset Management 50 South La Salle Street Chicago, Illinois
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 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 Invest In High Yield Bonds
Investment Perspectives For high-yield bonds, market volatility can bring new opportunities Kevin Lorenz and Jean Lin, portfolio managers for TIAA-CREF High-Yield Fund Article Highlights: The decline in
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 informationInsurance Dedicated Funds: Variable Insurance Trusts
At a Glance September 2015 Insurance Dedicated Funds: Variable Insurance Trusts Our goal at GSAM is to meet the financial goals of investors worldwide, now and in the future, with innovative investment
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 informationGauging Current Conditions: The Economic Outlook and Its Impact on Workers Compensation
August 2014 Gauging Current Conditions: The Economic Outlook and Its Impact on Workers Compensation The exhibits below are updated to reflect the current economic outlook for factors that typically impact
More information2013 GSAM Insurance Survey & Industry Investment Trends
Global Insurance Asset Management AASCIF Annual Workshop Fall 23 23 GSAM Insurance Survey & Industry Investment Trends Michael Siegel, PhD Global Head of GSAM Insurance Asset Management September 3, 23
More informationStatement by. Janet L. Yellen. Chair. Board of Governors of the Federal Reserve System. before the. Committee on Financial Services
For release at 8:30 a.m. EST February 10, 2016 Statement by Janet L. Yellen Chair Board of Governors of the Federal Reserve System before the Committee on Financial Services U.S. House of Representatives
More informationAn actively managed approach for today s fixed-income markets
Q3 2015 Putnam multi-sector fixed-income funds An actively managed approach for today s fixed-income markets D. William Kohli Michael V. Salm Paul D. Scanlon, CFA Putnam s three Co-Heads of Fixed each
More informationBond Market Perspectives
LPL FINANCIAL RESEARCH Bond Market Perspectives March 26, 2013 High-Yield Bonds and the Credit Cycle Anthony Valeri, CFA Market Strategist LPL Financial Highlights More speculative issuance has increased
More informationTarget Retirement Funds
Prospectus March 1, 2015 Target Retirement Funds Institutional Class Administrative Class Investor Class Harbor Target Retirement Income Fund HARAX HARBX HARCX Harbor Target Retirement 2015 Fund HARGX
More informationMoving Forward With the Normalization of Yields
Moving Forward With the Normalization of Yields April 8, 2014 by Scott Mather, Michael Story of PIMCO One response to yield normalization is to consider retaining core bonds and diversifying the specific
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 informationBetter domestic economy but lower rates
ZACH PANDL, PORTFOLIO MANAGER AND STRATEGIST 215 PERSPECTIVES INTEREST RATES: FAREWELL, LIQUIDITY TRAP With continued growth and further improvement in labor markets, the Federal Reserve (the Fed) looks
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 informationGlobal Fixed Income WITH VOLATILITY TO REMAIN ELEVATED, SELECTIVITY IS KEY
PRICE POINT December 2015 Timely intelligence and analysis for our clients. Global Fixed Income WITH VOLATILITY TO REMAIN ELEVATED, SELECTIVITY IS KEY EXECUTIVE SUMMARY Elevated volatility in bond and
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 informationPROTECTING YOUR PORTFOLIO WITH BONDS
Your Global Investment Authority PROTECTING YOUR PORTFOLIO WITH BONDS Bond strategies for an evolving market Market uncertainty has left many investors wondering how to protect their portfolios during
More informationRethinking Fixed Income:
Rethinking Fixed Income: The Importance of Income and Flexibility January 2011 Executive Summary Over the past 30 years, fixed-income investors have benefited from one of the largest secular trends in
More informationGlobal high yield: We believe it s still offering value December 2013
Global high yield: We believe it s still offering value December 2013 02 of 08 Global high yield: we believe it s still offering value Patrick Maldari, CFA Senior Portfolio Manager North American Fixed
More informationPIONEER ADVISORY: Pioneer Absolute Return Credit Fund Name Change
May 2013 PIONEER ADVISORY: Pioneer Absolute Return Credit Fund Name Change Effective June 17, 2013, the Fund s name will change to Pioneer Dynamic Credit Fund. It should be noted that the Fund s portfolio
More informationEnergizing High Yield Bond Investors: Finding Opportunities Amid Shifting Market Conditions
Energizing High Yield Bond Investors: Finding Opportunities Amid Shifting Market Conditions Energizing High Yield Bond Investors: Finding Opportunities Amid Shifting Market Conditions Contents Executive
More informationSenior Floating Rate Loans
Senior floating rate loans have become a staple of the U.S. debt market and have grown from a market value of $126 billion in 2001 to $607 billion as of year-end 2011. 1 For over 20 years, managed senior
More informationHigh Yield Bonds in a Rising Rate Environment August 2014
This paper examines the impact rising rates are likely to have on high yield bond performance. We conclude that while a rising rate environment would detract from high yield returns, historically returns
More informationSTEWARD FUNDS MANAGING WEALTH, PROTECTING VALUES SOCIALLY RESPONSIBLE SCREENED FUNDS. PROSPECTUS August 28, 2015
STEWARD FUNDS MANAGING WEALTH, PROTECTING VALUES SOCIALLY RESPONSIBLE SCREENED FUNDS Steward Large Cap Enhanced Index Fund Individual Class SEEKX Institutional Class SEECX Steward Small-Mid Cap Enhanced
More informationActive vs. Passive in Fixed Income Funds
Active vs. Passive in Fixed Income Funds White Paper February 2015 Not FDIC Insured May Lose Value No Bank Guarantee For Not financial FDIC Insured professional May Lose use Value only. Not Bank for inspection
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 informationInvestment insight. Fixed income the what, when, where, why and how TABLE 1: DIFFERENT TYPES OF FIXED INCOME SECURITIES. What is fixed income?
Fixed income investments make up a large proportion of the investment universe and can form a significant part of a diversified portfolio but investors are often much less familiar with how fixed income
More informationHigh-Yield Spread U.S. 10-Year Treasury Yield Investment Grade Spread
WisdomTree ETFs BOFA MERRILL LYNCH HIGH YIELD BOND ZERO DURATION FUND HYZD The U.S. high-yield bond market has been one of the best-performing subsets of the fixed income investable universe over the past
More informationUncovering Income in a Rising-Rate Environment
ederated Uncovering Income in a Rising-Rate Environment NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE The Yield-Seekers Challenge Strategies for a Rising-Rate Environment As the economy continues to
More informationBond Market Insights July 15, 2015
Bond Market Insights July 15, 2015 by Jerry Wiesner, CFA and Stephen Frahm General Bond Market Treasury yields rose during the second quarter as prices fell. The yield curve steepened, as long yields rose
More informationNuveen Intelligent Risk Conservative Allocation Fund will be liquidated after the close of business on June 24, 2016.
NUVEEN INTELLIGENT RISK CONSERVATIVE ALLOCATION FUND SUPPLEMENT DATED APRIL 18, 2016 TO THE SUMMARY PROSPECTUS DATED DECEMBER 31, 2015 Nuveen Intelligent Risk Conservative Allocation Fund will be liquidated
More informationHigh Yield Credit: An Evaluation for Prospective Insurance Company Investors
High Yield Credit: An Evaluation for Prospective Insurance Company Investors Low interest rates challenging traditional insurance company business model More insurance companies using high yield to mitigate
More informationNuveen Tactical Market Opportunities Fund
Nuveen Tactical Market Opportunities Fund Summary Prospectus January 29, 2016 Ticker: Class A NTMAX, Class C NTMCX, Class I FGTYX This summary prospectus is designed to provide investors with key Fund
More informationA GUIDE TO FLOATING RATE BANK LOANS:
Contact information: Advisor Services: (631) 629-4908 E-mail: info@catalystmf.com Website: www.catalystmf.com A GUIDE TO FLOATING RATE BANK LOANS: An Attractive Investment for a Rising Interest Rate Environment
More informationDrobny Guest Research September 12, 2012
Drobny Guest Research September 12, 2012 3701 Highland Ave, Suite 302, Manhattan Beach, CA 90266 andres@drobny.com (310) 545-6996 ------------------------------------------------------------------------------------------------------------
More informationDEUTSCHE ASSET & WEALTH MANAGEMENT REAL ESTATE OUTLOOK
Research Report DEUTSCHE ASSET & WEALTH MANAGEMENT REAL ESTATE OUTLOOK Second Quarter 2013 Economic Outlook Business and consumer spending to drive recovery Quantitative easing beginning its expected unwinding
More informationMonthly Economic Dashboard
RETIREMENT INSTITUTE SM Economic perspective Monthly Economic Dashboard Modest acceleration in economic growth appears in store for 2016 as the inventory-caused soft patch ends, while monetary policy moves
More informationA Strong U.S. Dollar Changes Everything
Schwab Center for Financial Research A Strong U.S. Dollar Changes Everything A white paper by Kathy A. Jones, Senior Vice President, Chief Fixed Income Strategist The U.S. dollar is near its highest level
More informationLeader Short-Term Bond Fund. Leader Total Return Fund
Leader Short-Term Bond Fund Institutional Shares: Investor Shares: Class A Shares: Class C Shares: LCCIX LCCMX LCAMX LCMCX Leader Total Return Fund Institutional Shares: Investor Shares: Class A Shares:
More informationThe case for high yield
The case for high yield Jennifer Ponce de Leon, Vice President, Senior Sector Leader Wendy Price, Director, Institutional Product Management We believe high yield is a compelling relative investment opportunity
More informationMay 1, 2015 as amended June 1, 2015
INSTITUTIONAL INVESTOR May 1, 2015 as amended June 1, 2015 DATE TARGET FUNDS MyDestination 2005 Fund MyDestination 2015 Fund MyDestination 2025 Fund MyDestination 2035 Fund MyDestination 2045 Fund MyDestination
More informationpercentage points to the overall CPI outcome. Goods price inflation increased to 4,6
South African Reserve Bank Press Statement Embargo on Delivery 28 January 2016 Statement of the Monetary Policy Committee Issued by Lesetja Kganyago, Governor of the South African Reserve Bank Since the
More informationMainStay VP Janus Balanced Portfolio
Summary Prospectus May 1, 2015 MainStay VP Janus Balanced Portfolio To Statutory Prospectus To Statement of Additional Information Before you invest, you may want to review the Portfolio's Prospectus,
More information