As central banks near the end of hiking cycles, the environment is becoming increasingly supportive for fixed income.
26.06.2023 | 08:05 Uhr
If interest rates stay higher for longer, then bond investors earn the current high level of yield. If on the other hand, the economy enters a deep recession and central banks begin easing monetary policy, bond investors benefit from price appreciation as well as the yield. The only clearly negative environment for bond investors would be a reacceleration of inflation that leads central banks to become more hawkish, but this seems unlikely at the moment.
Nonetheless, continuing uncertainty about inflation and risk of recession means this is an environment where diversification, balance and flexibility in portfolios can be key.
In this paper, portfolio manager, Damien McCann and investment director, Flavio Carpenzano discuss opportunities across the credit spectrum in the current macro environment.
Damien J. McCann is a fixed income portfolio manager at Capital Group. He has 23 years of investment industry experience, all with Capital Group. Earlier in his career at Capital, he was a fixed income investment analyst and covered energy, leisure and lodging, and rails. He holds a bachelor's degree in business administration with an emphasis on finance from California State University, Northridge. He also holds the Chartered Financial Analyst® designation. Damien is based in Los Angeles.
Flavio Carpenzano is an investment director at Capital Group. He has 18 years of industry experience and has been with Capital Group for two years. He holds a master's degree in finance and economics from Università Bocconi. Flavio is based in London.
Past results are not a guarantee of future results. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
Copyright © 2023 Capital Group. All rights reserved.