Research & Resources
Timely commentary to give you access to the latest macroeconomic and investments insights. Learn what investors should expect next.
Since the Global Financial Crisis (GFC), central banks around the world have used a variety of monetary policy tools to bring down interest rates and stimulate economies. But even 10 years post-crisis, many developed countries still have government bond yields that are historically low.
In June 2017, the Federal Reserve Open Market Committee indicated that, provided the economy continues to perform as anticipated, the Fed would soon begin implementing balance sheet normalization. The term “balance sheet normalization” means gradually reducing the Federal Reserve’s securities holdings by paring back principal payment reinvestments.
Interest rates are poised to rise in the U.S., which can mean tough times for fixed income investors. However, not all bond strategies are alike in how they perform in rising rate environments. In fact, high yield has a record of generating significant returns in periods when rates rise, but high yield is not without other types of risk.
The current economic expansion, which according to the National Bureau of Economic Research began in Q3 2009, is the third longest since 1945. However, it is also one of the weakest in terms of economic growth and activity.
Interest within the U.S. institutional investor community for understanding and applying Environmental, Social and Governance (ESG) factors to their asset pools slowed substantially as they faced the economic and financial meltdown in 2008-09. When faced with dramatic negative returns affecting markets here and around the world, being laser focused on asset allocation and portfolio structure is a natural and appropriate reaction.