Perspectives Blog

2015 Outlook — Same song, slightly different arrangement

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 15, 2014

…ur outlook remain in place, we highlight two important changes in the market environment: The relative value of global equities vs. global bonds actually improved during 2014. Monetary policy around the globe has become desynchronized, with the U.S. Federal Reserve (the Fed) contemplating rate hikes, while the European Central Bank (ECB) and the Bank of Japan (BOJ) intensify their monetary stimulus programs. In this article, I will detail the i…

Asset allocation — Where does fixed income fit it?

Columbia Management Global Asset Allocation Team, | August 25, 2014

Surprisingly solid returns for bonds in the first half could lead to disappointment in the second half of the year. We continue to believe high-yield bonds are worth holding, especially higher quality ones. Improved country fundamentals and strong technical support favor EM bonds but caution that returns could be less stable in the near term. So far this year, returns on bonds are positive, with longer duration U.S. bonds performing even bette…

Gut check: The outlook on fixed income

Colin J. Lundgren, CFA, Head of U.S. Fixed Income | February 24, 2014

The next big move in rates may be triggered by concerns about possible future Fed rate hikes. High-quality bonds may struggle to generate coupon-like returns. Emerging markets may ultimately benefit from the synchronized uptick in growth in global developed markets. With nearly two months of the year behind us, we thought now would be a good time to see how the fixed-income market is faring in 2014 and assess our outlook. We asked our investme…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…ncreases in the second half of 2014 as bond markets begin to reflect the increasingly mature recovery. Municipal bonds James Dearborn, Head of municipal bonds investments Review: Municipal bonds had a strong first half of 2014. While the drop in Treasury rates since the end of 2013 is the primary reason for the strong performance, there are specific municipal bond market factors that bolstered tax-exempts’ returns including: a dearth of new suppl…

Sizing up the fixed income market

Colin J. Lundgren, CFA, Head of U.S. Fixed Income | September 29, 2014

…trategies can help mitigate these risks by focusing on the most attractive parts of the market such as corporate bonds, recognizing liquidity constraints posed by Wall Street and mega managers, and using market disruptions that do not have lasting effects as investment opportunities. First, the case for exercising caution around interest rates is strong, but investors shouldn’t paint all bonds with the same brush. Fed policy makers appear set to…

Do you know what’s in your short-term bond fund?

Columbia Management, Investment Team | December 1, 2014

…kinds of risks the fund is taking. Is the fund earning its yield by investing in riskier below-investment grade bonds, through riskier sectors or longer maturity bonds? Remember, there is no free lunch. Higher yield generally means higher risk. In this low and uncertain interest rate environment, how can conservative investors stay invested, avoid excess interest rate or credit risk and still generate a competitive return? A high-quality short-t…

What’s the outlook for muni bonds?

James Dearborn, Head of Municipal Bonds | June 19, 2014

…ew supply and a resurgent demand by investors seeking attractive taxable-equivalent yields. We believe municipal bonds should continue to perform well in the second half of 2014. Yields on muni bonds are compelling when considering the impact of taxes on non-exempt securities. As we reach the halfway point of 2014, it’s a good opportunity to review our full-year outlook for the municipal bond market and consider what the second half of the year…