The municipal fixed income market, like most other asset classes, is experiencing unprecedented volatility. Large mutual fund outflows are adding to the volatility as investors seek to add to cash reserves by selling what may be deemed easiest to sell.
On Thursday, March 12, Rick Raczkowski, co-lead portfolio manager of Core Plus Fixed Income participated in a conference call with clients to discuss recent events and market activity. He discussed that while there is a lot of fear and uncertainty in the market right now he and co-lead portfolio manager Peter Palfrey, are maintaining their discipline of managing through the cycle as they have for the past 20 years.
On Friday, March 13, Loomis Sayles’ Global Fixed Income team held a conference call to discuss the current market environment, policy responses and potential opportunities. Here, portfolio managers Lynda Schweitzer and Scott Service summarized a few key points.
Municipal closed-end funds (“CEFs”) currently offer high levels of tax advantaged income and can often be purchased at a discount to their current net asset value.
On Thursday, March 12, Loomis Sayles’ Full Discretion team held a conference call to discuss current conditions, upcoming challenges and potential portfolio positioning and solutions. Here, portfolio managers Matt Eagan and Elaine Stokes summarized a few key points.
The Loomis Sayles Alpha Strategies team shares some insights as markets grapple with three issues: the impact of COVID-19, an oil fight and a crisis of confidence in Western governments.
Long-term perspective is key as coronavirus and falling oil prices roil markets. Members of the Matthews Asia investment team share their insights and outlook amid volatile markets.
Our Emerging Markets Equity team examines the impact of the spread of coronavirus across emerging market economies during the month of February.
Responsible investing has gathered enough momentum in recent years to reach the mainstream. What is less clear is how far along global institutional investors are in the process of integrating environmental, social and governance (ESG) principles into their investment decisions.
The US equity markets have fallen sharply the past week on concerns of coronavirus diseases 2019. This novel coronavirus affects the respiratory system, was first identified in Wuhan, China more than two months ago, and has now spread to all major economies globally.
In January, we highlighted signs of green shoots in economic data—learn how recent developments affect our outlook.
What does a “correction” mean, what’s likely to happen next and what can investors do now?
Investors who want bigger returns from their high-yield strategies should consider a global approach.
Our forecasts for stocks generally improved in January as stocks declined, but they fell for bonds as rates rallied. Coronavirus and growth fears weighed on markets, pushing Value and non-U.S. stocks down most.
How contained is the coronavirus outbreak? That’s the question that rattled markets on Monday, sending the Dow industrials down more than 1,000 points, or 3.6%. The S&P 500 index declined by 3.4%.
As markets continue to assess the impact of coronavirus (COVID-19), the Templeton Global Macro team shares an update on the economic and market implications, which they say could be more detrimental—and last longer—than many observers previously thought.
The Lazard Multi-Asset team details their views over the next six to 12 months. While the United States-China Phase 1 trade agreement and the United Kingdom’s exit from the European Union have reduced near-term uncertainty and improved sentiment, the coronavirus outbreak in China could have a noticeable negative effect on global economic activity.
The coronavirus outbreak and the Democratic primary have affected sector leadership. However, we’re keeping our sector views unchanged—for now.
Our emerging markets equity team looks at news and events shaping emerging market performances in January, from coronavirus fears to trade to Middle East tensions.
A review of last month’s market-moving events across countries and asset classes.
One way for high-yield investors to gauge how their bonds may fare down the road has been with this simple, accessible and historically accurate tool.
Learn more about the remarkable lives and contributions of three leading African American economists.
Overcomplicating things is seldom on the path to investment success. The stunning ascension of Tesla has confounded, in a manner no less than stupefying, the investment thesis of many.
The third and final set of year-end updates to the Crestmont Research.
It is probably hard to remember after a week or so of coronavirus fears, but during Q4 2019, “risk” assets once again outperformed “haven” assets. This was after two quarters of “haven” asset outperformance.
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One of the most important discoveries in finance over the past few decades is that stocks of firms that share certain fundamental characteristics called “factors” exhibit different return and risk characteristics than the overall market. Critical to investors is the fact that, over long periods of time, certain of these factors have earned excess returns compared to the overall market.
Ten charts illustrate the macroeconomic trends most likely to shape Fed policy and investment performance in 2020 and beyond.
Emerging markets are expected to grow more and grow faster than developed markets in 2020, and fundamentals appear attractive for both equities and debt. Trade tensions and global growth prospects are, as ever, the issues to watch in the new year.
The US municipal market registered strong performance in 2019, driven by record demand from individuals and constrained supply of tax-exempt issuance. Both factors grew out of changes legislated in the 2017 Tax Act. As we enter 2020, valuations appear tight versus Treasurys and fair versus corporates and risk assets generally.
The GMO Asset Allocation team has released its latest 7-Year Asset Class Real Return Forecasts
The recent runup in valuations has reduced the margin for error in today’s markets.
Last New Year’s Eve, most would not have forecasted the extent of the gains experienced by the U.S. stock markets this year. On the heels of the worst December since 1931, the Federal Reserve’s (the Fed) 180-degree turn, from restrictive to accommodative policy, fueled the S&P 500’s roughly 30 percent surge and pushed the U.S. economic expansion into record territory.
Looking ahead, we believe the global economic environment will remain supportive for securitized sectors despite potentially slowing economic growth. In the US, we believe strong fundamentals, including robust wage growth and healthy household balance sheets, will provide solid support for real estate and consumer-related credit.
2019 was a very unusual year. Domestic growth whipsawed from strong (over 3%) to concerning (just over 1%). This volatility was compounded by both domestic and global headline factors: a very public trade dispute and very weak global growth.
Emerging markets ended 2019 on a high note, but can the momentum continue? Our emerging markets equity team weighs in, highlighting the market news and events it has an eye on.
A brief monthly update on what's happening in the municipal bond market.
We expect emerging market (EM) fixed income asset classes to continue to perform well in 2020. Though the sector appears to be starting from less attractive valuations than a year ago, in a low-yielding world, we see opportunity for relative performance in credit and local rates and a tactical tailwind for EM currencies.
We expect European investment grade bonds to post slightly positive excess returns in 2020. We believe the sector stands to benefit from healthy supply and demand balances, likely offsetting tight valuations and weakening fundamentals.
Will 2020 be more of the same? Our teams are encouraged by differences they see in the new year; but they remain alert for unexpected downturns.
The US investment grade (IG) corporate bond market is coming off an exceptionally strong year. Declining interest rates coupled with sharply narrower credit spreads contributed to strong absolute and relative returns.
2019 was a triumphant year for the US large cap equity market, with the S&P500 index up 31% on a total return basis. The resolution of two major concerns in the year, namely the US Fed being too aggressive on rate hikes, and the US/China trade relationship hanging in a total impasse, drove the market higher, particularly in 1st and 4th quarter.
Markets appear to expect the Federal Reserve to hold interest rates steady during 2020. In this environment, we think the outflows seen in leveraged loan mutual funds are likely to abate, and possibly change directions.
As long as good economic conditions prevail, significant downside risk in the stock market is likely to be deferred, and the market will likely benefit from its current momentum.
A combination of spread compression and reduced US Treasury base rates contributed to double-digit gains in the high yield corporate credit sector in 2019. However, unlike many years with similar returns, lower-quality, CCC-rated credits meaningfully lagged their higher-quality counterparts. At this point in the extended credit cycle, investors appear wary about the performance of lower-quality credits.
As the year winds to a close, take a look back with us at our top ten favorite blog posts of the year—the thought leadership pieces that sparked the highest levels of engagement among our readers.
We expect to see flows back into UK equity and credit now that some of the Brexit uncertainty has been removed.
Why should investors pay attention to the China A-share market? We explain why we believe the opening of one of the most liquid and diverse markets in the world has profound implications for global portfolios.