Has the Attractiveness of Gilts Improved for UK Investors?
Yes. We believe the attractiveness of UK government bonds has improved relative to just a month ago.
Credit/Fixed Income
Market Matters: September 30, 2022
Risk assets declined again in third quarter. Global equities recorded the worst three-quarter decline since the 2008–09 Global Financial Crisis.
Market Matters: August 31, 2022
Risk assets broadly retreated in August, reversing course mid-month on the growing realization that elevated interest rates may be around longer than expected.
US Manager Universe Statistics: Second Quarter 2022
This publication presents manager performance for 37 asset classes and substrategies, showing the median, mean, and key percentiles of return. Relevant indexes for each asset class are also included to provide market context.
Do Municipal Bonds Still Have a Role to Play in Taxable Portfolios?
Yes. Munis still have value on an after-tax basis over the long term, and their near-term outlook has improved following the rise in yields and spreads during this year’s sell-off.
Market Matters: July 31, 2022
Risk assets rebounded in July as stocks rallied off recent bear market lows and bond yields ticked lower, boosted by better-than-expected second quarter earnings results and signs that the Federal Reserve could slow the pace of interest rate increases sooner than anticipated.
Review of Market Performance: Fiscal Year 2022
Fiscal year 2022 was a challenging one for public market investments. Rising levels of inflation across most developed and emerging markets saw central banks become more aggressive in their monetary tightening plans. This in turn saw correlations between bonds and equities become positive; bonds declined as a direct result of higher inflation and tighter policy, while equities weakened in response to the higher cost of capital. This chart book presents returns and other market metrics for fiscal year 2022.
Should Investors Start Adding High-Yield Bonds and Loans to Portfolios Given the Recent Sell-Off?
No, as the risk/reward remains uncompelling and spreads may widen further if a recession ensues. However, the sell-off has enhanced our enthusiasm for collateralized loan obligation (CLO) debt, which offers attractive pricing, solid fundamentals, and lower interest rate sensitivity than most other credit investments.
VantagePoint: Have US Equities Hit Bottom?
Given the uncertain economic and profit environment, have markets bottomed yet? In this edition of VantagePoint, we address this question by comparing current market conditions to those of historical bear markets, evaluating economic conditions to better understand near-term recession prospects, and considering how much further the market may have to go based on historical precedents.
Market Matters: June 30, 2022
Investor sentiment soured in second quarter, leading to steep declines across nearly all asset classes. Global equities foundered as developed and emerging stocks alike fell into bear markets. Rising interest rates and deteriorating global economic growth prospects meant growth stocks trailed value, while large caps edged small caps. Aggressive monetary tightening and high inflation pressured government bond performance, while corporates lagged on rising credit spreads. Real assets also declined, with energy commodities being the lone exception among major asset classes as oil prices continued climbing. Against this backdrop, the US dollar appreciated to a 20-year high, euro performance was mixed, and UK sterling mostly weakened.