For the right sized asset manager, disruptions in the fixed income market can create short-term opportunities. Liquidity has deteriorated in recent years and can escalate when a mega manager needs to sell a large position. The case for exercising caution around interest rates is strong, but investors shouldn’t paint all bonds with the same brush.
While the bond market has generated strong returns so far in 2014, we are positioning portfolios with a shorter duration to protect against rising interest rates. Although we think that corporate bonds look better than their government counterparts, the most attractive bond market opportunities may be outside of the corporate market. Investors should remain flexible in order to
In the following video, Gene Tannuzzo, senior portfolio manager for strategic income and multi-sector fixed income, explains his outlook for bond markets. Global bond markets have posted strong returns so far in 2014, driven by largely by factors outside of the U.S. Looking forward, we expect U.S. interest rates to rise, and so we are
Prospective returns for Treasuries now look poor across the curve—not just at the front end. Yield curves tend to flatten as central banks raise short-term rates, but valuations have now moved beyond the point where these trades make sense. Investors should brace for higher interest rates, not just a flattening yield curve. When the facts
ECB action this week maybe not enough to restore confidence by itself, but it signals a readiness to defend the inflation target, thus lowering odds of Japanification. U.S. growth accelerating into September 16-17 FOMC meeting. Look for another cut to bond purchases and more clues on the exit game plan. In typical fashion, last week’s
We have advocated an overweight to equities for several years. Even through the early year setbacks for the global economy and for global stocks, our views favored equities over other investment choices. To the degree that our overall investment stance has been overweight equities, we have willfully assumed a higher risk profile than usual. So
We look for securities that offer a balance of credit fundamentals and yield. We use a “roll-down” analysis to identify the sweet spot on the yield curve. We believe yield curve positioning is the largest driver of returns for intermediate municipal portfolios. The cornerstone of the Columbia Management municipal investment process is identifying relative value