SPONSORED Focused on Fundamentals in an Unsettled Market
The rapid innovation and disruption occurring across industries, coupled with a market that is digesting dislocations stemming from the coronavirus pandemic and a flood of central bank liquidity, mean that differentiating between volatility and actual business risk is more critical than ever for growth investors with a longer time horizon.
SPONSORED Playbook for a Shifting Economic Landscape
The global recovery appears on track, but policymakers may be challenged to restrain inflation without stifling growth. U.S. equity valuations are vulnerable to rising interest rates. Slowing U.S. earnings growth could increase the attractiveness of ex-U.S. equity markets. The risk of central bank missteps could produce volatile bond markets.
SPONSORED Growth Delayed but Not Derailed
The delta variant seems likely to have only delayed rather than derailed the global recovery—perhaps making growth over the coming quarters modestly more robust than it might otherwise have been. How today’s elevated bond and equity valuations will respond to the normalization of monetary policy is an open question, however.
SPONSORED If Taxes Increase, Are Your Clients’ Portfolios Ready?
Investors have renewed interest in tax-efficient investment models in search of better after-tax returns. Municipal bonds can be impactful in a tax-efficient portfolio, but equity tax-efficiency can be harder to find. Investors could consider tax-advantaged investment vehicles, dedicated tax-efficient strategies, and active mutual funds with tax-efficient alpha.
SPONSORED Sticking with Value
The value rally has recently fizzled, and growth stocks have regained ground, narrowing the performance gap considerably. However, despite strong fundamentals, growth stock valuations are extreme relative to value stocks. Our Asset Allocation Committee continues to favor value stocks as potential catalysts could be supportive.
SPONSORED A Moderating Outlook for Equities
In March and April, our Asset Allocation Committee modestly decreased the allocation to equities, given elevated stock valuations and a moderating economic outlook. In our view, key performance drivers may peak in the near term, which could temper potential equity returns going forward.
SPONSORED Positioning for a New Economic Landscape
Economic recovery from the pandemic appears set to strengthen across regions and countries in the second half of 2021. A key question is whether growth will be strong enough to meet earnings expectations without fueling inflation. Valuations for many equity averages are stretched, but there may be outperformance potential in some non-U.S. markets.
SPONSORED A Different Perspective on Sequence-of-Returns Risk
Historically, equities have tended to generate higher medium- and long-term returns than fixed income and cash assets. Our analysis suggests that over the 95 years that ended in December 2020, most investors could have accumulated larger balances by following higher-equity glide paths, even after experiencing large market declines near retirement.
SPONSORED Loans May Provide Solid Returns in Multiple Rate Environments
Many investors typically focus on bank loans only when the Federal Reserve is expected to raise interest rates in the short term. While loans have historically performed well under those conditions, we believe the asset class can potentially add value as a strategic allocation in various market environments within the economic and interest rate cycles.
SPONSORED Three Critical Questions Facing Fixed Income Investors in 2021
The challenges of the current fixed income environment may not be fully understood by investors. For that reason, we have identified three issues that we believe investors should consider: focusing on the diversification power of bonds, their performance potential, and their liquidity profile for 2021.
SPONSORED: Consensus Expectations May Be Overestimating the Recovery Trajectory
The continuing threat posed by the coronavirus, necessitating ongoing social distancing, means it is hard to gauge how long the current economic disruption might last. Consequently, we believe consensus expectations may be overestimating the trajectory for improvement and that a return to a “normalized” environment may take longer than anticipated.
SPONSORED Global Equities: Embracing Uncertainty
While times like these are challenging for investors, we believe they can also help sharpen conviction in underlying investments. We have not made any wholesale changes. With a longer-term approach to investing, we believe the fear of others will continue to present us with attractive opportunities.
Secular Risk Creates New Opportunities in High Yield Bonds SPONSORED
A growing number of companies are facing secular risks that could impair their long-term growth prospects. While this trend poses challenges for many traditional issuers of high yield bonds, it is also creating a new generation of companies in the high yield market that offer attractive opportunities.
Shopping for Potential in Latin America
T. Rowe Price equity analyst Paulina Amieva talks to management, suppliers, and customers in Mexico City.