Staying balanced as central bank policies shift

• A more dovish stance by the Federal Reserve (Fed) helped push US Treasury yields down from an annual high of 4.99% in mid-October to unchanged on the year at 3.88%.
• We expect US inflation to be within striking distance of the Fed’s 2% target in the next six to 12 months. Inflation has been falling globally, but the path forward is less clear.
• US economic growth may persist, albeit at a slower pace, while prospects for economic growth around the world are mixed.
• We remain cautiously constructive on the US economic outlook and are looking to remain balanced in portfolios. Our highest conviction ideas call for a steepening of the yield curve and positions in agency mortgage-backed securities.

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.
• Depending on the strategy, 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.