Perspectives Blog

Q2 fixed income outlook – Hitting for the cycle

Gene Tannuzzo, CFA, Senior Portfolio Manager | March 31, 2014

We have started to reduce exposure to high-quality bonds with limited upside potential and high-yield bonds in which credit risk appears too aggressive. Following weakness last year, emerging market debt has posted gains this year, and we expect further strength ahead as volatility subsides. While we expect a flatter yield curve over the next few months as investors focus on the timing and pace of rate increases, we don’t think they should avoi…

Global Asset Allocation Outlook (as of February 24, 2014)

Columbia Management Global Asset Allocation Team, | March 10, 2014

…hile earnings have not kept up. This month, we moderated our overweight in European equities from overweight to neutral. In the past few weeks emerging economies — particularly those in Eastern Europe — experienced heightened volatility. For the moment, the situation is relatively calm but risks remain that volatility could re-emerge. We maintain a neutral outlook on overall emerging markets equities, but have lowered our overweight to EMEA regio…

Japan — All in with Abenomics

Fred Copper, Senior Portfolio Manager | June 6, 2013

Japan has gone all-in in their battle against deflation and stagnant growth. Prime Minister Shinzo Abe has committed to a fiscal and monetary blitzkrieg, and there’s no going back. Huge uncertainty and massively divergent outcomes will manifest as continued jaw dropping volatility in the financial markets.   Price return of Nikkei Index, November 2012 — May 2013 Source: Bloomberg, May 2013, Past performance does not guarantee fut…

Opportunity in lower-quality municipals

Columbia Management, Investment Team | August 15, 2013

Recently enacted higher tax rates — and the threat of even higher rates — enhance the attractiveness of tax-exempt income, especially versus other income-producing securities. Lower quality, shorter maturity investment-grade municipal bonds may provide similar yields as longer maturity bonds, but with lower interest-rate risk and volatility. Independent and well-resourced credit research is a critical tool in lower-quality municipal bond invest…

Second quarter asset allocation positioning

Columbia Management, Investment Team | May 14, 2013

…attractive relative value. However, high-quality fixed-income sectors tend to outperform in economic downturns, and we believe they should account for a portion of assets in a well-diversified portfolio. With a potential for volatility spikes, low correlation absolute return strategies should continue to be a part of diversified portfolios. In addition, select commodities and hybrid strategies with low correlation to equities can also add divers…

The world has gone global. Have you?

Paul Berlinguet, Vice President, Equity Products | May 21, 2013

…s with diverse revenue streams. While problems in Europe or the fiscal cliff in the U.S. remind us that sovereign issues often drive stock prices temporarily, a well-diversified mix of U.S. and International stocks can dampen volatility. Market dislocations can often give investors the opportunity to buy global companies that may derive little revenue from their home country, “on sale.” With equity yield in high demand in the U.S. tha…

Monetary policy shift creates new investment challenges

Columbia Management, Investment Team | August 6, 2013

…you must reconsider the dynamics of portfolio diversification in an era where policy tightening might be expected to generate simultaneous losses across many asset classes. Our favored areas for taking investment risk Recent volatility might have soured investors’ taste for investment risk-taking, but we believe that numerous opportunities for positive expected returns remain for the balance of 2013. In fact, the repricing of many assets as the…