Fixed-Income Outlook: Managing Through a Persistent State of Heightened Volatility  - Title Image

Fixed-Income Outlook: Managing Through a Persistent State of Heightened Volatility

In the second-quarter 2016 report, our fixed-income team discusses where we’re finding relative value amid market volatility.

May 24, 2016


Report Highlights

  • We expect the heightened first quarter volatility will continue into the summer. This will create opportunities to allocate to positions overly discounted due to unwarranted fears of recession or financial crisis.
  • Macroeconomic factors, such as solid but unspectacular economic growth, a cautious Fed, and improving oil market supply/demand fundamentals, underpin our generally positive outlook for U.S. credit.
  • A stabilized oil market should support credit performance of issuers in the energy sector. Our outlook applies primarily to the investment-grade corporate bond market, but it should also support select high-yield issuers as well.
  • Structured credit continues to have a significant weighting in our strategies based on our relative value analysis across fixed-income markets.
  • We expect the Fed to raise rates once in 2016. In our view, policymakers will be watching Chinese growth, the “Brexit” vote in June, and the U.S. presidential election in November.
  • Our investment process, which is designed to avoid cognitive biases, snap judgments, and other decision-making pitfalls, provides a foundation for disciplined, systematic, and repeatable investment results that does not rely on one key individual or group.
 
 
 
Important Notices and Disclosures

This article is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. This article contains opinions of the author but not necessarily those of Guggenheim Partners or its subsidiaries. The author’s opinions are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Guggenheim Partners, LLC. ©2016, Guggenheim Partners. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information.
 


FEATURED PERSPECTIVES

High-Yield Credit in a Fed Easing Cycle - Featured Perspectives
July 17, 2019

High-Yield Credit in a Fed Easing Cycle

High-yield corporate bond spreads and bank loan discount margins typically widen when the Fed is lowering interest rates.

Managing While Risk Premia Shrink - Featured Perspectives
June 17, 2019

Managing While Risk Premia Shrink

The Federal Reserve’s policy pivot has supported a rally in most credit sectors, but investors should worry about late cycle excesses.

U.S.-China Trade War: The New Long March - Featured Perspectives
May 23, 2019

U.S.-China Trade War: The New Long March

Beijing is preparing for a protracted standoff as the U.S.-China trade war ramps up.


VIDEO

Fixed-Income Outlook 

First Quarter 2019 Fixed-Income Outlook

Portfolio Manager Adam Bloch and Macroeconomic and Investment Research Group Director Matt Bush share insights from the first quarter 2019 Fixed-Income Outlook.

Solving the Core Fixed-Income Conundrum 

Solving the Core Fixed-Income Conundrum

Anne Walsh, Chief Investment Officer for Fixed Income, shares insights on the fixed-income market and explains the Guggenheim approach to solving the Core Conundrum.







© 2019 Guggenheim Partners, LLC. All rights reserved. Guggenheim, Guggenheim Partners and Innovative Solutions. Enduring Values. are registered trademarks of Guggenheim Capital, LLC.