INVESTMENT INSIGHTS | December 2019 | FEATURING Sunder Ramkumar , Michelle Black & Vincent Fu
Diversification is no longer what it used to be when it comes to investing in international equities. Global equity correlations have increased significantly following greater trade and market linkages between countries, eroding the traditional diversification benefits of investing in this asset class.
INVESTMENT INSIGHTS | August 2019 | FEATURING Greg Garrett
Central banks continued to play a pivotal role in guiding investor sentiment during the second quarter. Signs of slowing growth, increased market volatility and trade tensions were enough to convince them that potential downside risks warranted a response. At its June meeting, the U.S. Federal Reserve clearly articulated the potential for policy rate cuts in the second half of 2019. The European Central Bank and the Bank of Japan conveyed similar messages. This shift improved investor sentiment and drove credit spreads lower; they finished the quarter slightly below where they began.
INVESTMENT INSIGHTS | July 2019 | FEATURING Colyar Pridgen
Since the early years of liability-driven investing (LDI), many defined benefit (DB) pension plan sponsors have cast a wide net for investments to reap higher returns and hedge long-term plan liabilities. While this has led some sponsors toward ever more creative and less traditional avenues to access long duration, the core hedging assets in most LDI programs remain investment-grade government and credit bonds, often weighted toward the long end (maturities of 10 years or more).
INVESTMENT INSIGHTS | May 2019 | FEATURING Greg Garrett
After a significant widening of spreads in the fourth quarter, credit markets rebounded along with equities and other risk assets during the first quarter. A key catalyst of positive sentiment was a more accommodative stance from the U.S. Federal Reserve. This drove U.S. Treasury yields lower across the yield curve and pushed the 10-year Treasury rate below the fed funds rate – a condition that has preceded each of the last three recessions by one to three years. Long-dated investment-grade credit spreads narrowed by 27 basis points (bps) to 173bps during the quarter. The spread tightening combined with lower Treasury yields cut the long corporate credit yield to 4.41% from 4.91%.
INVESTMENT INSIGHTS | February 2019 | FEATURING Greg Garrett
Global economic momentum decelerated in the fourth quarter. An inversion of two- and five-year yields and shifting growth expectations contributed to significant stock market volatility and wider credit spreads. Long duration investment-grade corporate bond spreads widened 47 basis points to 200bp, mostly due to falling U.S. Treasury yields.
INVESTMENT INSIGHTS | February 2018
This article was originally published on Dec. 20, 2017, and has been updated to reflect the bill's passage into law.
INVESTMENT INSIGHTS | February 2018 | FEATURING Mike Gitlin
- Prospects for higher U.S. inflation appear well supported.
- Yield-chasing bond strategies can leave investors more vulnerable to further selloffs in equities.
- Investors should seek to upgrade their portfolios.
Mike Gitlin, head of fixed income at Capital Group, has 24 years of investment industry experience. He discusses the current market environment and what it means for bond investors.
Capital Group chairman and chief executive officer Tim Armour discusses the sudden return of volatility to the markets and provides helpful context for advisors and investors.
INVESTMENT INSIGHTS | February 2018 | FEATURING Timothy D. Armour
Stocks have declined in recent days amid investor concerns about higher inflation and rising interest rates. In this interview, Capital Group Chairman and CEO Tim Armour discusses the drivers of this sudden downturn and his long-term outlook for the financial markets.
INVESTMENT INSIGHTS | February 2018 | FEATURING Jared Franz
The equity market lost more than 8% in a few weeks’ time. This decline to the S&P 500 Composite Index, which began in late January, is the first of its kind since 2016. This volatility comes as investors come to terms with a new economic and investment environment of higher interest rates and rising inflation.
INVESTMENT INSIGHTS | January 2018
When will the Federal Reserve make its next move, and how high could rates go? These questions can seem like the only ones that matter in a hiking cycle. Plan sponsors, however, need to think differently. In an Asset TV “LDI Masterclass,” panelist Greg Garrett makes the case for looking at scenarios — and considering the possible impact on plan funded status.
Mike Kerr, a principal investment officer of The Growth Fund of America®, shares his thinking on industries and companies currently held in the fund, including technology, entertainment and health care.
INVESTMENT INSIGHTS | November 2016
Synchronize your risk tolerance and LDI glide path
- What is the optimal way for a defined benefit plan to de-risk? This is one of the most challenging questions faced by plan sponsors.
- To answer appropriately, a sponsor must first consider their risk tolerance and the objective factors influencing it — including the plan’s relative size, whether it’s open or closed, and business cyclicality.