Search results for: yield curve

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Oil and the high yield market

By Jennifer Ponce de Leon, Senior Portfolio Manager and Head of High Yield and Mark Van Holland, CFA, Senior Portfolio Manager 

Size of the Energy Sector

Because the energy sector is a large component of the U.S. high yield market relative to some other asset classes, the market has received increased scrutiny due to recent declines in oil prices. Prior to the recent sell off, energy accounted for more than 15% of the high yield market, making it by far the largest industry (healthcare is the second largest at approximately 8.5%).

Tagged with: Fixed Income, Investing

What are the credit markets telling asset allocators?

Credit spreads can contain important information about investors’ expectations regarding risks to corporate solvency, and the economic cycle more generally. Rising credit spreads can also reveal strains in the financial system that are only later reflected in equity market valuations.

Tagged with: Investing, U.S. Economy

Should you own longer duration bonds in a rising rate environment?

In the next Fed tightening cycle, another “bear flattener” may occur, during which short rates increase and long rates either decline or rise less than short rates. Such a bear flattener is likely to result in long muni bonds outperforming shorter bonds.

| Tagged with: Investing, Monetary Policy, Municipal Bonds, Tax Strategies, U.S. Economy

Making sense of negative interest rates

Buying bonds at negative rates is a guarantee of losing money in nominal terms.
Central banks must keep real rates low to help their economies reach a self-sustaining growth path. Investors should focus on asset classes that benefit from this growth rather than providing the free money to support it.

Tagged with: Equities, Fixed Income, Global Perspectives, Investing

Harnessing Fixed-Income Returns Through The Cycle

Leveraging a multidimensional approach

There are four unique, major fixed-income risks – duration, credit, inflation and currency – and different fixed-income investments respond to them differently. Applying a full understanding of the four risks to a fixed-income portfolio may yield a better risk-return outcome.

| | Tagged with: Asset Allocation, Featured Fund, Fixed Income, Interest Rates, Investing, Portfolio Strategies

Challenges facing government money market funds

Investors with no risk tolerance or who need stable $1 NAV will likely gravitate towards government money market funds. Such funds may provide peace of mind and liquidity, but will be challenged to offer a competitive yield.

Tagged with: Global Perspectives, Investing

Interest rates — Farewell, liquidity trap

The U.S. Treasury market as a whole has returned +1% annualized since the end of 2012 (and +0.5% annualized since the low in 10-year yields in July 2012). Because of imminent Fed rate hikes and depressed yield levels, prospective returns look no better today.

Tagged with: Economy, Fixed Income, Investing

Income and the interest rate game

An investment strategy based purely on guessing where interest rates are headed is destined to miss the mark. We still expect the Fed to raise rates soon (but probably not in October) and we think longer term rates should drift higher (but we wouldn’t want to bet the farm on that).

Tagged with: Dividend Investing, Economic Policy, Economic/Markets Outlook, Economy, Global Perspectives, Interest Rates, Investing, Markets, Monetary Policy, U.S. Economy
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About Us

Columbia Threadneedle Investments is a leading global asset management group that provides a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world. With more than 2,000 people, including over 450 investment professionals based in North America, Europe and Asia, we manage $471 billion†† of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.

††In U.S. dollars as of September 30, 2015. Source: Ameriprise Q3 Earnings Release. Includes all assets managed by entities in the Columbia and Threadneedle groups of companies. Contact us for more current data.