What shouldn’t you do as the Federal Reserve tightens policy? You shouldn’t be passive. Passive muni investors suffer from the painful phenomenon of clipped wings. That’s when passive strategies can’t rapidly reinvest in higher-yielding securities as rates climb, unlike their more nimble, actively investing cousins.
UFC and mixed martial arts (MMA) have seen their popularity grow in recent years from relative obscurity, banned in many states, to the mainstream. Does the current fight represent a view of the future (e.g. the NFL and the upstart AFL) or a novelty (e.g. the XFL)? The fight highlights the topic of convergence and its current poignancy, from boxing to politics to investments.
In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group takes a look at recent US economic data, and increased skepticism among many market participants about whether the Federal Reserve will implement another increase in interest rates before the end of the year.
A year ago, Templeton Global Equity Group’s Norm Boersma, Cindy Sweeting and Heather Arnold penned an article for Beyond Bulls & Bears discussing the signs of a revival in value stocks. With the nascent rally in global value stocks underway, the trio return along with their colleague Tucker Scott to outline where they now see the next pockets of overlooked potential opportunities for patient bargain hunters.
In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group examines whether inflation may gain momentum in the United Sates, why it’s pleased the European Central Bank has resisted tapering of its quantitative easing program and why investors in all markets need to be cognizant of political risks.
On the surface, passive municipal ladders seem like a sensible investment. Simple. Easy. Cheap. But the numbers don’t lie.
With markets seeking to avoid similar toe-stubbing in the policy arena, we examine the drivers of the fixed income markets for the near term. In doing so, we consider President Trump’s fiscal policy influence, Janet Yellen’s monetary policy impacts and evolving exogenous geopolitical dynamics. So, who or what will determine the market’s course moving forward?
Franklin Templeton Fixed Income Group talks monetary policy, European politics in the April Global Economic Perspective.
Passive global bond investors may be getting more than they bargained for—in terms of risk, that is. That’s because lower-yielding debt is overrepresented in the benchmark, providing less buffer—and passive investing locks other types of risk into the portfolio.
In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group weighs in on the factors spurring the US Fed’s decision to raise rates, why the ECB’s Draghi is likely to resist calls to adopt a more hawkish line, and why the backdrop for emerging markets has improved.