Quarterly macro and market insights from Capital Group’s fixed income team

The statements expressed represent perspectives from Capital Fixed Income Investors, as at 31 December 2022. The views of individual portfolio managers and analysts may differ. © 2023 Capital Group. All rights reserved. Data as at 31 December 2022, and attributed to Capital Group / Bloomberg Index Services Ltd, unless otherwise stated.

Outlook for bonds brighter even as growth concerns linger
 

• Global growth is expected to weaken as central banks remain restrictive, though many economies have shown more resilience than previously expected
• Inflation should continue to lose steam in 2023, although it may remain uncomfortably high relative to central bank targets
• Higher yields and relative value opportunities offer better return potential for 2023

Risk factors you should consider before investing:

• This material is not intended to provide investment advice or be considered a personal recommendation.
• The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment.
• Past results are not a guide to future results.
• If the currency in which you invest strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will decrease. Currency hedging seeks to limit this, but there is no guarantee that hedging will be totally successful.
• Risks may be associated with investing in fixed income, derivatives, emerging markets and/or high-yield securities; emerging markets are volatile and may suffer from liquidity problems.