The bond market picked up in 2021 where it left off in the fourth quarter of 2020, with the yield on the benchmark 10-year U.S. Treasury rising from 0.93% on December 31, 2020 to 1.75% on March 31, 2021. The dramatic move spelled carnage for fixed-income markets, with the Bloomberg Barclays Aggregate U.S. Bond Index losing 3.4% during the quarter (bond prices move in inverse to bond yields).
The bond market picked up in 2021 where it left off in the fourth quarter of 2020, with the yield on the benchmark 10-year U.S. Treasury rising from 0.93% on December 31, 2020 to 1.75% on March 31, 2021. The dramatic move spelled carnage for fixed-income markets, with the Bloomberg Barclays Aggregate U.S. Bond Index losing 3.4% during the quarter (bond prices move in inverse to bond yields).
Convertible bonds performed well during Q1 2021 despite some significant rotations. Factors such as stimulus and reflation are positioned to support the continued outperformance in 2021.
Agency mortgages are those that are explicitly or implicitly guaranteed by the government. There are three GSEs (Government Sponsored Entities); Fannie Mae, Freddie Mac, and Ginnie Mae. GSE mortgages and bonds backed by those mortgages have no credit risk, but do have interest rate risk.
Agency mortgages are those that are explicitly or implicitly guaranteed by the government. There are three GSEs (Government Sponsored Entities); Fannie Mae, Freddie Mac, and Ginnie Mae. GSE mortgages and bonds backed by those mortgages have no credit risk, but do have interest rate risk.
CIFC Asset Management’s Natalia Lojevsky and Stan Sokolowski provide their insights into the Fixed Income Markets, which have been experiencing an elevated bout of volatility as interest rates and inflation expectations have risen sharply. Stan and Natalia discuss the sea of red YTD for traditional fixed income returns and say we’re in a golden age for income producing alternatives.
CIFC Asset Management’s Natalia Lojevsky and Stan Sokolowski provide their insights into the Fixed Income Markets, which have been experiencing an elevated bout of volatility as interest rates and inflation expectations have risen sharply. Stan and Natalia discuss the sea of red YTD for traditional fixed income returns and say we’re in a golden age for income producing alternatives.
On an absolute basis, many markets and financial assets seem expensive relative to historic levels. However, as Barclays Capital notes, “Valuations may be detached from fundamentals but not reality.” Cash levels are enormous and numerous investors undoubtedly are sheltering in “safe” assets.
For months, investors have been scaling what feels like an endless wall of worry. Each concern that gets resolved seems to spawn new uncertainties, yet the market has continued its relentless climb higher.
We’ve lived this movie before. Last August, AAII bullish sentiment struck a 52-week high right before the Fed launched its September rate cutting cycle.
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