Active Fixed Income

News related to tariffs, DOGE, geopolitical unrest, NVIDIA earnings, and more significantly impacted U.S. stock markets recently, with the S&P 500 retreating over 2.5% during the second half of February. There are signs that meaningful structural shifts are taking place in the market.

The 60/40 portfolio, where 60% is invested in stocks and 40% in bonds, is the initial starting point for many portfolios. The exact asset mix is often adjusted based on an investor’s time horizon, risk tolerance, and financial goals, but the simple, proportional stock-bond combination is what is often considered a “balanced” portfolio.

The Liberal Party of Canada has wrapped up its leadership race, with Mark Carney winning by an overwhelming margin.

There has been further indication that the U.S. will underperform during a negative market, according to DoubleLine's Jeffrey Gundlach.

Stock/bond divergence allows investors to reap the benefits of portfolio diversification, giving bond exchange-traded funds credence.

Recent US stock weakness may be related to a downturn in US economic data and headline shocks related to tariffs.

For decades, the U.S. dollar’s dominance has rested on two pillars: America’s deep capital markets and its global security alliances. Today, both are under strain.

Parametric’s tax optimized ladders (TOL) solution may help to enhance after-tax yield by seeking to optimize the allocation between tax-exempt and taxable bonds, based on an investor’s own tax rate and the relative value between sectors.

Stock/bond divergence allows investors to reap the benefits of portfolio diversification, giving bond exchange-traded funds credence.

At the start of the year, our Investment Strategy Committee outlook was positive for both the economy and the equity market, supported by strong consumer, labor market, and corporate fundamentals.

The European Central Bank will likely continue to cut interest rates, but future decisions could be more contentious.

We highlight some underreported positive developments that could keep economic growth on track and support higher equity prices in the months ahead.

Q4 company earnings offered a lot to cheer at the start of the year, even as U.S. stocks contended with bouts of volatility.

One month into President Donald Trump’s new term, financial markets are adjusting to a rapidly shifting economic and policy environment. Investors are watching closely as tariffs, interest rate expectations and regulatory changes take center stage.

The municipal bond tax exemption is back in focus. We believe the threat to infrastructure investment outweighs the modest revenue benefits, which could keep the risk of elimination or significant curtailment low.

In his testimony before the House Financial Services Committee February 12, Federal Reserve Chair Powell was questioned about why mortgage rates had not declined.

U.S. fixed income ETFs garnered strong flows in February, uncovering insights into investor behavior and risk appetite in 2025.

Ever since interest rates got up off the floor in 2022, there’s been increased interest in credit, and that’s why I’m devoting this memo to it. It’ll come a little closer than usual to “talking my book,” but I think the subject justifies that.

The value today of quality bond exposure in your high yield portfolio.

Opportunities have increased significantly in frontier markets debt as more countries have made a conscious effort to open their capital markets to international investors and currencies have become more fairly valued.

As daily headlines drive volatility, the market has avoided overreacting thus far.

We view quarterly earnings season as a critical checkup on how markets are handling current challenges.

We manage risk tactically over the short-term by investing across a broad array of themes and asset classes including cash.

A holistic approach may help insurance investors navigate an expansive opportunity set.

February’s market turbulence saw investors pivot toward defensive strategies as policy uncertainty intensified, driving a broad market rotation from mega-cap tech stocks to bonds, gold, and international equities.

Today we are going to revisit that matrix updated through 2024. We will see what we got right and wrong, what further inferences we can now make and why I think it confirms my general shift in market strategy over the past few years.

Despite GDP figures indicating continued expansion, weakening consumer confidence and persistent inflation concerns speak to uncertainty.

With major US policy change unfolding, flexibility across and within asset classes will be critical.

Looming U.S. and global policy shifts may potentially rattle markets, but a tactical and flexible approach could help investors navigate risks and opportunities regardless of how events play out.

We delve into the unprecedented level of equity risk investors are taking, the record-high uncertainty measures facing further impacts from deglobalization, and the benefits of maintaining a diversified portfolio through it all.

Should you avoid lower-rated, riskier investments like high-yield corporate bonds or bank loans? Not necessarily, but you should understand the risks.

In the report, John Kerschner, Head of US Securitized Products & Portfolio Manager, and John Lloyd, Lead for the Multi-Sector Credit Strategies & Portfolio Manager, review the best-performing U.S. fixed income sectors of 2024 – what worked, what didn’t, and what it means for investors going forward.

We recently sat down with Justin Owens, our senior director and co-head of strategic asset allocation, to discuss the next phase of liability-driven investing (LDI) and the key trends driving this evolution. Below is a recap of our conversation.

On this week’s episode of ETF Prime, VettaFi’s Todd Rosenbluth shares advisor polling data on fixed income.

The U.S. economy remains structurally productive. American Economic Exceptionalism is powered by innovation and labor flexibility.

When constructing a target-date fund (TDF) glide path, providers have many decisions to make, such as what asset classes to include, when to include them, and how much to allocate to each.

The managed account industry has seen tremendous growth and client adoption, with assets increasing by 28% over the last year and 50% over the past two years.

With our most reliable valuation measures more extreme than both the 1929 and 2000 market peaks, we continue to believe that the stock market is tracing out the extended peak of the third great speculative bubble in U.S. history.

Attractive yields and a broad opportunity set bolster active bond investments amid today’s uncertain macroeconomic and market outlook.

Taxable municipal bonds may be an attractive option for investors in lower tax brackets, but there are things investors should know before making a decision.

Long maturity treasuries can provide downside protection to offset equity risk, in our view.

Global equities ended 2024 on a strong note, driven by the continued dominance of U.S. equities, which were propelled even higher by the reelection of President Donald Trump.

Lofty U.S. stock valuations call for a renewed focus on risk assessment and portfolio diversification.

Rising inflation, the potential added pressure from tariffs, and ongoing volatility create a strong backdrop for gold appreciation this year.

The second Trump presidency marks a new regime for government policy, with a range of potential macroeconomic and market implications.

Private credit has been one of the most talked-about segments in fixed income markets over the last few years.

Stocks bounced back after tariffs on imports from Mexico and Canada were delayed, but tariff issues are not yet solved and still hold the potential to drive market volatility.

Tariff concerns are not only affecting inflation expectations but also Americans’ consumption patterns.

Building a bond portfolio these days isn’t easy. Interest rates have been volatile. Credit spreads are tight. And sweeping change in US fiscal, trade, and regulatory policy is underway. We think securitized assets deserve a closer look.

At the same time, the Fed has mostly ignored the impact of easy financial conditions—the combination of stock, bond, and credit conditions—offsetting increases in interest rates by bolstering wealth and confidence.

Recent developments may just offer advisors and investors fresh pathways with which to attain higher yield in 2025.

Michael Contopoulos breaks down why CLOs offer attractive relative value, why short-duration positioning may help manage interest rate uncertainty, and the importance of an active approach for this year in particular.

The Federal Reserve’s record of forecasting has frequently led it to respond too late to changes in economic and financial conditions. In the most recent FOMC meeting, the Federal Reserve changed its statement to support a pause in the current interest rate-cutting cycle.

Could the U.S. dollar lose its place as the world's reserve currency? Despite a long-term trend toward currency diversification, we don't see the dollar losing dominance anytime soon.

As the sequel unfolds, particular industry sectors in affected countries are likely to be more impacted. Global Head of Credit Research Mike Talaga, Head of EMEA Credit Research James Maxwell, and Client Portfolio Manager Celia Soares discuss the implications for credit investors.

Municipal bonds were a hot topic at last week’s VettaFi Fixed Income Symposium — more than I expected them to be.

Investors are increasingly moving into active ETFs from mutual funds, as the ETF structure may offer numerous benefits over mutual funds.

Exploring the delicate balance between protectionism and global cooperation

Alex Mackey of MFS delved into the active bond strategies underpinning MFSB and MFSM in the recent Q1 2025 Fixed Income Symposium.

Some allocators may focus their search efforts on corporate credit segments or simply a portfolio that can opportunistically trade across fixed income sectors.

Since our last update of our ‘Three Tactical Rules’ on November 26, 2024, equity markets are up slightly.