Stirland, Sarah
While this view would be more directly positive for government bonds, corporate and EM bonds should also benefit. This, in turn, should help offset corporate and EM bonds’ lack of value due to relatively tight yield premiums over government bonds. Separately, in our Foundation allocations, we ...
Heading into 2024 our top-down asset allocation mirrors our fundamental outlook – positioned neutral to risk — our equity rules-based strategies are currently fully invested, and our risk managed income fund is positioned in high yield and floating rate securities. We recently increased allocations ...
Investment-grade corporate bonds remain attractive given their lower risk and relatively high yields. Long-term investors who can handle volatility might consider high-yield bonds and preferred securities, but we wouldn't suggest large positions in eithe
We are Overweight EM USD-denominated government bonds as we believe the relatively high yield and better value mean it is likely to outperform global bonds. In contrast, we are Underweight EM local currency bonds as we believe the yield does not compensate for taking on currency risk. Many ...
EXHIBIT 2: …While Investors Have Also Gotten More Optimistic About the Outlook for Credit, High Yield in Particular U.S. High Yield Implied Default Rate, % Data as at May 24, 2024. Source: Bloomberg. EXHIBIT 3: Risk Assets Have Responded Favorably to the Idea That There Will Be Fewer ...
A soft landing would likely prompt the Federal Reserve to lower its key interest rate in 2024, which would help restore a more normal shape to the yield curve, where longer-term bonds offer higher yields than shorter-term ones. However, a potential challenge for the bond market is the ...
In our 2024 Asset Allocation Outlook, bonds emerge as a standout asset class, offering strong prospects, resilience, diversification, and attractive valuations compared with equities.
Given the close relationship between the excess returns of high yield bonds (relative to government bonds) and equity returns, we see high yield as a relatively lower risk option on an eventual recovery in equity returns. Chasing income Higher yields can be achieved with less duration and credit...
In a potentially more volatile outlook for equity markets, investors should adopt a selective stance in their equity allocations. December 4, 2023 Global Market Outlook Positioning the Pieces What are the key risks and opportunities in 2024? Our Outlook brings you an actionable set of investment vi...