We are as convinced as ever that equities have a significant advantage over other asset classes based on valuation. Managing the risk of simultaneous drawdown across asset classes requires a process to actively de-risk portfolios and a methodology for diagnosing the conditions to trigger such a step. To manage risk and stabilize portfolio values in
The U.S. Treasury market as a whole has returned +1% annualized since the end of 2012 (and +0.5% annualized since the low in 10-year yields in July 2012). Because of imminent Fed rate hikes and depressed yield levels, prospective returns look no better today. We recommend investors take profit in long-duration fixed-income sectors that benefited
The idea that Western economies may have entered a period of secular stagnation has been attracting an increasing amount of attention. If this thesis proves correct, we would expect investment grade credit to produce decent excess and total returns as discount rates fell further in such an environment. Equity valuations look consistent with some probability
By Jennifer Ponce de Leon, Senior Portfolio Manager and Head of High Yield and Mark Van Holland, CFA, Senior Portfolio Manager Size of the Energy Sector Because the energy sector is a large component of the U.S. high yield market relative to some other asset classes, the market has received increased scrutiny due to recent
Lower oil prices should translate into higher demand as a result of cheaper petroleum prices and through higher global GDP growth, which in turn drives oil demand. While there are several factors that could serve to offset this higher demand, we should see some additional demand as a result of lower prices. The entrance of
Source: Columbia Management Investment Advisers, LLC. The chart reflects the views of the Global Asset Allocation Team as of November 19, 2014. Asset classes are ranked from 1 (overweight) to 5 (underweight), with 3 representing a neutral allocation.
When discounted for index composition, U.S. equities are not trading at a significant premium to Europe. One can draw some very misleading conclusions about any disparate group by only looking at the aggregates. Those who draw broad conclusions based on index valuations may be creating opportunities for those who can dig deeper for them. Nobody