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Premium Versus Par: What Municipal Bond Investors Need to Know
by Stephanie Larosiliere of Invesco,
With interest rates close to historically low levels, many municipal bonds available for purchase are priced at premiums. Because investors have traditionally preferred to purchase municipal bonds at or near par value, they may be overlooking these premium bonds because of a common misperception: Many investors believe that if they pay a premium, their returns will always be lower at the bond’s maturity. However, this simply isn’t true. Below I answer some common questions and correct some misperceptions associated with paying a premium for muni bonds.
Four Reasons to Consider Investing in Municipal Bonds
by Stephanie Larosiliere of Invesco,
In today’s low interest rate environment, the Invesco Municipal Bond team believes there are still attractive yields in the municipal bond market, making the asset class a compelling stand-alone opportunity or addition to a broader investment portfolio.
Metals and mining: The worst appears over for these bonds, but risks remain
Since early January, metals prices have turned sharply higher, thanks in part to a weaker US dollar and improved sentiment about China. In turn, we have seen a strong reaction in the bonds of metals and mining companies — investment grade and high yield metals and mining bond yields are tighter by 300 and 500 basis points, respectively.1 Following such strong moves, the question now is whether there is still value in metals and mining bonds.
Dividend Value: These Three Sectors Warrant a Closer Look
by Meggan Walsh of Invesco,
In a year like 2016 — in which equity markets plunged and then bounced back to flat all in the first quarter — portfolio managers are often asked where opportunities lie in “up” or “down” markets. For the Invesco Diversified Dividend team, however, that’s simply not the way we look at the world. Performance for a manager may be great in either a bull or a bear market, but it’s the ability to add value over both that we believe is most important.
The Bank of Japan Leaves Monetary Policy Unchanged
by Sean Connery of Invesco,
The Bank of Japan (BoJ) announced at its April 28 policy meeting that it would keep monetary policy unchanged. Invesco Fixed Income has been inclined to think that the BoJ would wait. It was only in January that it eased policy last, and we had anticipated that it would want to fully assess the impact of those actions before easing further. Furthermore, the recent increase in oil prices and weakening in the yen may have bought the central bank some additional thinking time. However, recent polls indicated that many non-Japanese investors had expected easing.
Lower Oil Prices Have Varied Effect on Municipal Bond Market
by Stephanie Larosiliere of Invesco,
The decline in oil prices since the summer of 2014 continued throughout the first quarter, as oil supply surpassed demand and we saw substantial price declines. This is of particular interest to municipal bond investors, as many US state and local budgets have a substantial dependence on oil production and exploration revenue, and lower oil prices can influence economic growth and inflation, which can affect Treasury and municipal yields.
Alternative Investing: Why Manager Skill is Crucial to Results
by Walter Davis of Invesco,
A key attribute of alternative investments is that alternative managers are typically given considerable freedom in how they invest. This freedom means that manager selection, an important consideration for all investors, becomes particularly crucial when investing in alternatives.
What Would a Stronger Dollar Mean for Global Markets?
As the world watches the progress of the US Federal Reserves tapering program, and anticipates the strengthening of the US dollar, Were often asked how this affects our view of international markets and risk. The short answer is that it doesnt. Were long-term, bottom-up stock pickers , so we;re primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.
What Would a Stronger Dollar Mean for Global Markets?
As the world watches the progress of the US Federal Reserves (Feds) tapering program, and anticipates the strengthening of the US dollar, were often asked how this affects our view of the international market and risk. The short answer is that it doesnt. Were long-term, bottom-up stock pickers, so were primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.
Auto Focus: Voluntary Plans Morphing to Mandatory?
by Jon Vogler of Invesco,
The American private retirement system has historically been voluntary. Employers first decide whether theyre going to sponsor a plan and then select the plans features. But over the last several years, focus has intensified on two criticisms of the voluntary system.
Equities: As Companies Reinvest, the Long-Term View Turns Bullish
This is the third in a three-part series on the economy, earnings and equities. The first two posts examined the US Federal Reserves gross domestic product (GDP) goals and how they set the stage for businesses to increase their capital expenditures. This post discusses the US manufacturing resurgence and the outlook for equities.
China: As Growth Slows, the Need for Reform Grows
by John Greenwood of Invesco,
The world is closely monitoring the status of Chinas economic growth rate. The countrys economy began to rapidly grow in the late 1970s, and it had been growing at about 9% or 10% per year, until the global downturn of 2008 and 2009. During the global financial crisis, the economy slowed abruptly. Since then, it has not been able to get back to that 10% growth rate.
US Balance Sheet Repair: More Difficult This Time
by John Greenwood of Invesco,
In most developed economies, the post-war years since 1945 saw sustained business cycle expansions alternating with shorter recessions. At the end of each expansion, authorities dealt with inflation by raising interest rates and slowing credit growth. When inflation subsided, interest rates were lowered again.
Eurozone: Why a Breakup Is Still in the Cards
by John Greenwood of Invesco,
I was recently asked whether I still hold the view that the eurozone will fragment, or whether I have moved from that position. Simply put, I am sticking with my position. I think that eventually one or more smaller countries will defect from the eurozone. Cyprus came close to it, and I think Greece may still exit.
Global Real Estate Is Hot Again, but Where Are the Best Opportunities?
by Joe Rodriguez of Invesco,
In this low interest rate environment, yield-hungry investors have been moving out of bonds, and many are opting for real estate investment opportunities. Combine that with a structural undersupply of institutional quality real estate in many key cities across the globe, and an attractive case for investment starts to emerge. Heres where we see the most attractive and promising opportunities by region this year.
Earnings: Why Capex Will Be the New Driver of Business Growth
This is the second in a three-part series on the economy, earnings and equities. The first post examined the US Federal Reserves gross domestic product (GDP) goals. Here, we discuss how those GDP goals set the stage for businesses to increase their capital expenditures.
The Economy: Why Interest Rates Shouldn't Rise Anytime Soon
Real is irrelevant. The US Federal Reserve (the Fed) is unconcerned about real GDP the inflation-adjusted measurement of US economic growth. Rather, without inflation in our economy, the Fed is focused on raising nominal GDP. And that priority means that interest rates should stay low for the foreseeable future.
New Highs Bring New Worries
by Richard Golod of Invesco,
The sustainability of the rallies in US and Japanese equities this year so far is looking uncertain amid slowing year-over-year earnings growth and mixed global economic signals. European and emerging market shares have traded lower year to date and seem likely to continue lagging in the near term. However, on balance, I remain optimistic about global equities, seeking yield opportunities and investments with an actively managed, more selective approach.
Gold Market Free Fall: Time to Jump Ship?
by Walter Stabell III of Invesco,
The gradual fall of the gold market intensified this week as investors reacted to signals that the US Federal Reserve would wind down its stimulus bond-buying programs as well as reports that the Cyprus government could sell its gold reserves to fund the countrys debts.
The Bank of Japan Pulls All the Stops
by Raymund Uy of Invesco,
The Bank of Japan (BOJ) surprised the markets by announcing a particularly aggressive round of quantitative easing (QE) designed to rid the Japanese economy of its persistent deflation. The new policy was unexpected not only in the size of the asset purchases announced, but also in the types of securities to be purchased and their maturity.
Capping 401(k) Deferrals: A Path to Deficit Reduction or a Danger to Small Business Plans?
by Jon Vogler of Invesco,
As Ive cautioned in previous blog entries, retirement savings incentives may be a prime target for policymakers searching for ways to ferret out government revenue in the name of deficit reduction.
Plan Sponsors and Participants Need HELP
by Jon Vogler of Invesco,
The Senate Committee on Health, Education, Labor & Pensions (HELP Committee) held a hearing titled Pension Savings: Are Workers Saving Enough for Retirement? on Jan. 31, 2013. Witnesses shared successful initiatives and highlighted areas that need improvement to help workers achieve a financially secure retirement.
Still Bullish
by Richard Golod of Invesco,
Global equities (as measured by the MSCI All Country World Index) fell modestly in February amid reignited fears about the euros future, signs of distress in Chinas economy and the looming sequester deadline in the US. Nevertheless, I believe the US, Japan and emerging markets may offer compelling opportunities, while Europe requires a more selective approach.
In-Plan Roth 401(k) Conversions Part 2
by Jon Vogler of Invesco,
In Part 1, I cited a recent Aon Hewitt survey indicating many employers are considering adding a Roth option to their retirement plans. In this second part, Ill explore who might want to consider taking advantage of this conversion opportunity.
In-Plan Roth 401(k) Conversions Part 1
by Jon Vogler of Invesco,
A January 2013 survey by Aon Hewitt found that an increasing number of US employers plan to add a Roth option to their retirement plans over the next 12 months. The survey results come shortly after a provision in the American Taxpayer Relief Act (the "fiscal cliff" tax act adopted in January) gave workers a chance to stockpile more tax-free earnings as long as their employers' 401(k) plans include a Roth option, along with the ability to move assets accumulated in tax-deferred 401(k) accounts.
Health Care Reform: A Q&A With Our Municipal Bond Experts
by Shari Sikes, Art Schloss of Invesco,
Health care reform took center stage in the last year as the Supreme Court upheld the Patient Protection and Affordable Care Act of 2010 (ACA), affirming the constitutionality of portions of the law. The decision made it possible for major health care reform to proceed. This January, health care spending again was at the forefront during the fiscal cliff debate as a means to reduce government spending. Health care is poised to remain at the center of this discussion until a federal budget deal is reached.
Too Great Expectations
by Richard Golod of Invesco,
Global investors entered the year with newfound enthusiasm. Across the board, global equities traded higher in January, and retail money flows into global equities were the best in 17 years. Media reports about a "Great Rotation" from fixed income into equities are raising expectations about the possibility of a new secular bull market. However, I believe a little perspective is in order.
Investment Insights: Companies at a Crossroads
Despite a lack of corporate earnings growth in 2012, a surge of investor confidence boosted US stocks. But we don't believe that type of market rally is sustainable for the longer term. Looking ahead, we expect the market environment to be tougher in 2013 as companies face a crossroads: continue to hoard cash at the long-term expense of future growth, or reinvest in their business at the shorter-term expense of profit margins?
Retirement Landscape: Cliff, Clamor, Clarity and (Dis)closure
by Jon Vogler of Invesco,
With the November election in the rearview mirror, it's a good time to scan the retirement landscape. What can plan sponsors and plan participants expect on the regulatory and legislative fronts in the coming year? While I don't claim to have a crystal ball, there are some likely developments on the near-term retirement horizon.
Results 201–233
of 233 found.
