The Fixed Income Channel

The key to using active funds: Setting client expectations

Prepare clients for active fund volatility.

Are Factors Linked To Business Cycles?

There isn’t convincing evidence that a style-timing strategy, based on business cycles, can be expected to be profitable going forward.

The Latest Look at the Total Return Roller Coaster

Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $19,065for an annualized real return of 12.98%.

Asset Allocation Views: Singles and Doubles

With market volatility on the rise, consider a broad set of relative value opportunities across global markets.

The End Is Near for the US Credit Cycle. Are You Prepared?

The US corporate credit cycle is nearing its end, and the cycle in parts of Europe isn’t far behind. This can create treacherous conditions for unprepared investors. The first line of defense, in our view, is knowing what to expect.

When Value Goes Global

When the value trade goes global, investors are poised to benefit. Evidence from the international equity, bond, currency, and commodity markets indicates that the value premium is a global phenomenon that can offer important portfolio diversification. However, the devil is in the details: we argue that the successful implementation of global value strategies critically depends on an economically motivated design.

Trump Plays with Fire on Trade

With his announcement last week of broad tariffs on imported steel and aluminum, President Trump launched what could be the first salvo of an all-out global trade war. Seemingly itching for a fight, he gleefully tweeted that "Trade wars are good, and easy to win."

Contemplating Value in Emerging Markets Intelligently, with a Little Help from Ben Graham

In the latest GMO Emerging Equity Insights, titled “Contemplating Value in Emerging Markets Intelligently, with a Little Help from Ben Graham” Amit Bhartia and Matt Seto revisit Ben Graham’s principles of value investing and extrapolate them to investing in emerging markets.

4 Big Reasons Why Short-Term Muni Bonds Should Excite You

Municipal bonds might not be the first thing that comes to mind when you think of a sexy investment. They don’t typically command news headlines like the stock market or bitcoin. That doesn’t mean investors should disregard short-term munis. In fact, munis play a very important role in any serious portfolio. Below are four big reasons why you should get excited about muni bonds.

Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator

With the latest monthly close and the GDP Q4 Second Estimate data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 138.7%, up from 132.2% the previous quarter.

The February Dynasty Monthly Market Commentary: "If You Can Keep Your Head..."

We view the events of late January and early February as healthy – the final “death spasm” of market reliance on central bank policy, and a return to more normalized market conditions – volatility returns, earnings and fundamentals matter, and a reminder that stocks can go down sometimes as well as always up.

Weighing the Week Ahead: Will the US Launch a Trade War?

The economic calendar is normal but featuring the monthly employment report. Usually that would be the focus, and it might become so by week’s end. Until the situation is clarified, the paramount question will be: Has the US ignited a trade war?

Italian Election Result: Political Uncertainty is Business as Usual for Italy

No outright winner emerged from the Italian general election, but as David Zahn, Franklin Templeton’s head of European Fixed Income, explains, that situation is normal for Italy. He expects a muted response from European bond markets but cautions there may be consequences down the road if the authorities fail to take the need for reform seriously.

Gregg Fisher – The Advantage of Multi-Factor Investing

Gregg S. Fisher founded Gerstein Fisher in 1993 based on a vision of offering a quantitative investment management approach grounded in sound economic theory and more efficiently implemented through technology. In this interview, he discusses the virtues of multi-factor investing and which factors are attractive in today’s market.

Italian Election Results: Populist Undercurrents

Italian general elections were held on March 4, 2018. The election results point to a hung parliament, with no party or coalition winning enough votes to form a government.