August 16, 2017
Stock market indexes keep making new highs, credit performance has been strong, and credit spreads keep getting tighter. At the same time, volatility plumbs record lows and central bank policies continue to obscure free market price discovery. In the new edition of our Fixed-Income Outlook, our investment management team explains why a defensive posture is a prudent course of action, and discusses shorter-term, sector-specific tactics to position our portfolios to weather the looming correction. In particular, we believe credit risk assets are particularly at risk of a correction, so we have continued to reduce our exposure to that sector. Our high-yield corporate bond allocation across our Core and Multi-Credit strategies is now at the lowest level since their inception, and we have reduced our positions in lower-rated bank loans and CLO debt.
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FEATURED PERSPECTIVES
Should the mood this year at Davos prove once again to be a contra-indicator, this may be the signal that the economy is likely to re-accelerate soon and that the party in risk assets continues.
What would be a normal seasonal correction is turning into the worst December selloff in equities since the Great Depression.
Preparing for the market turbulence that typically occurs in the run up to a recession.
VIDEO
Global CIO Scott Minerd and Head of Macroeconomic and Investment Research Brian Smedley provide context and commentary to complement our recent publication, “Forecasting the Next Recession.”
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.
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