Many investors have attempted to capitalize on the inverted yield curve by purchasing long-term Treasuries (assuming continued declines at the long end will cause their bonds to appreciate). In his latest commentary, Venk Reddy, CIO of our Sustainable Credit Strategies, explains why he feels this approach is materially riskier than investing in short duration fixed income.
The current debt ceiling debate in Congress is a great reminder that investors should always prepare for the unexpected and invest in companies that are durable enough to withstand a range of economic scenarios.
Although inflation appears to have peaked, historical data suggests that prices are unlikely to reverse themselves, which could lead to an extended period of wage inflation.
Structurally tight labor markets are providing support for tighter monetary policy, but the Fed may be fighting an uphill battle.
In the face of what was the largest first half decline in the S&P 500 since 1970 and the worst ever start to a year for high yield bonds, short duration credit was not immune
Much has been made of the market’s relationship with the Fed in recent months.
In downward trending markets as we have seen for much of 2022, it is important to distinguish price declines which may present similarly.
Many of the participants in the short-term credit market use it as a place to deploy cash while waiting for higher risk opportunities.
For the better part of the last decade, interest rates have been near zero and leverage has driven asset prices higher.
For those who aren’t familiar with the term, greenwashing is the act of making investments which only superficially appear to fit a sustainability mandate. By doing so, a manager may have many clients who don’t notice that they have a number of irresponsible issuers in their portfolios.
In January, during the market frenzy which saw GameStop Corporation on stock go from approximately $20 to nearly $500 intraday within two weeks, some asked why the company did not capitalize on the demand by issuing shares.
Today, we find ourselves with particularly high confidence in the likelihood of three scenarios to which we believe all investors should be paying close attention. First, we anticipate the current market euphoria will likely last through the summer.
So… who is right? Can we learn from history, as Santayana believes? Or has the past just set the table for what’s to come, as Shakespeare wrote? Is the future determined by the past, as Vonnegut argues? Or are the two unrelated, as the SEC requires fund managers to tell their prospective investors? We suggest that the answer to all of these questions is yes.
In 2019, the bull market thinking of fixed income investors argued for a more disciplined approach to risk and return. The markets today are facing very different circumstances, but are suffering from the same lack of risk management.
Fed Funds futures are predicting that the Federal Reserve will lower their benchmark Fed Funds rate below zero by mid-2021. Will this really happen?
Fixed income markets are different from equity markets. This statement is absurdly self-evident when put into writing. But it’s not as obvious when put into the context of today’s market dynamics.
Like politics, investing philosophies are polarizing: be it a debate on active vs. passive or direct investments vs. funds. For fixed income, we lay out differences between indexed exposure to high yield and bank loans vs. fundamentally selected portfolios—and recognize there may be room for both in portfolios.
There is a small but growing community of advisors who are leaving behind the old ways of picking managers in an effort to give their clients something they can’t get on their own or from a robo-advisor.
