Bonds Look Attractive Compared With Cash, Equities

Text on screen: Bonds Look Attractive Compared With Cash, Equities

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Text on screen: DANIEL J. IVASCYN, Group Chief Investment Officer

Bonds look attractive. Using any type of reasonable longer term valuation metrics for equity markets here in the United States and across most areas of the globe, fixed income looks real attractive here. So we do think it makes sense, not only to think about shifting up from cash into fixed income to lock in high yields, increase the prospects for the price appreciation, but also makes sense as a risk reduction trade to think about shifting from public equities that have performed real well, that have valuations at best fair, and in some cases a bit stretched from a valuation perspective, into fixed income, which again looks as attractive as we've seen in well over a decade.

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Disclosure

All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed.

Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Investors should consult their investment professional prior to making an investment decision. Outlook and strategies are subject to change without notice.

This material contains the opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

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