Preview
Market insights at a glance
We believe the global economic outlook for fixed-income investments is optimistic, as central banks begin to ease policy and inflation is moderating, aligning with our base case. Despite tight spreads, our view is that we can identify attractive yields selectively and strong fundamentals support maintaining exposure to various spread sectors, emphasizing higher-quality assets for resilience against potential economic headwinds.
This summary is intended to aggregate the Firm’s current overall views and present an at-a-glance dashboard covering the following:
- Growth
- Inflation
- Rates
- Monetary Policy
- US Presidential Election
- Geopolitics
Ahead of the vote: Fixed income in an election year
The 2024 US presidential election outlook remains highly unpredictable, with current market indicators and betting odds continuing to fluctuate and showing no clear frontrunner. This uncertainty in the run-up, let alone the final results, could lead to shifts in fiscal policies and regulatory frameworks, and potentially influence market behavior. Given these factors, a prudent investment strategy involves maintaining a well-diversified portfolio to adapt to various possible outcomes.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Past performance is no guarantee of future results.
Fixed-income securities involve interest rate, credit, inflation and reinvestment risks; and possible loss of principal. As interest rates rise, the value of fixed income securities falls.
International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Investments in companies in a specific country or region may experience greater volatility than those that are more broadly diversified geographically. The government’s participation in the economy is still high and, therefore, investments in China will be subject to larger regulatory risk levels compared to many other countries. There are special risks associated with investments in China, Hong Kong and Taiwan, including less liquidity, expropriation, confiscatory taxation, international trade tensions, nationalization, and exchange control regulations and rapid inflation, all of which can negatively impact the fund. Investments in Taiwan could be adversely affected by its political and economic relationship with China.
Commodities and currencies contain heightened risk that include market, political, regulatory, and natural conditions and may not be suitable for all investors.
US Treasuries are direct debt obligations issued and backed by the “full faith and credit” of the US government. The US government guarantees the principal and interest payments on US Treasuries when the securities are held to maturity. Unlike US Treasuries, debt securities issued by the federal agencies and instrumentalities and related investments may or may not be backed by the full faith and credit of the US government. Even when the US government guarantees principal and interest payments on securities, this guarantee does not apply to losses resulting from declines in the market value of these securities.