Brian Smedley, Head of the Macroeconomic and Investment Research Group, and Portfolio Manager Adam Bloch share insights from the fourth quarter 2019 Fixed-Income Outlook.
In all likelihood, the Fed has successfully staved off recession, but current spreads reflect just how little upside there is in credit.
Staying the course in a time of increasing risk.
Much Progress, More Wood to Chop
Good risk management leads to good decision making.
Why active has the potential to outperform passive in fixed income.
Credit spreads could get tighter in this liquidity-driven rally, but history has shown that the potential for widening from here is much greater.
We do not think the rally in risk assets is sustainable.
Core-Plus vs. Core Fixed-Income Portfolio Management
The Federal Reserve’s policy pivot has supported a rally in most credit sectors, but investors should worry about late cycle excesses.
Given the compressed credit curve and tight spreads, we remain focused on capital preservation and protecting our clients from downside volatility.
Explaining the structure and investor-friendly features of collateralized loan obligations (CLOs), an often misunderstood sector of structured credit.
Given that we are late in the business cycle, life insurers must prepare their portfolios now to avoid reliving the painful lessons learned in the last crisis.
Risk assets will likely enjoy another rally while the Fed stays on hold, but the pause will only allow excesses to become more pronounced.
Preparing for the market turbulence that typically occurs in the run up to a recession.
While the U.S. economy remains on solid footing, exogenous risks threaten asset values, market confidence, and the strength of the U.S. economy.
Shortening duration, maintaining an investment-grade portfolio, and generating attractive yields do not have to be competing investment objectives for core fixed-income investors.
After several quarters of low volatility, tight spreads, and abundant liquidity, financial conditions are shifting.
Fixed-Income Outlook: Current conditions could persist for some time, but with a possible recession approximately two years away, the time for caution is approaching.
Prudent investors must look past melt-up conditions to the longer-term outlook.
As concerns mount that the market has become vulnerable to near-term shocks, we remain committed to reducing credit risk and spread duration.
Finding value in complexity: The structure, risks, and investor-friendly features of asset-backed securities.
Fixed-Income Outlook: With credit spreads at or near their peaks, our second quarter 2017 report focuses on economic fundamentals and evolving monetary and fiscal policy.
Our first quarter 2017 report reflects expectations for strong risk-asset performance as President Trump’s economic agenda takes shape.
In our fourth quarter 2016 report, investment team leaders discuss market conditions heading into a new administration and likely Fed rate hikes.
Our third quarter 2016 report, details our current fixed-income strategy, economic outlook and where we see relative value.
In the second-quarter 2016 report, our fixed-income team discusses where we’re finding relative value amid market volatility.
In our new quarterly publication, the leaders of our fixed-income investment team discuss relative value and outlook in current market conditions.
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