Hunter Frey, Analyst
Hunter Frey, Analyst

Chart of the Week: Bonds Begin to Diversify Equity Volatility

Chart of the Week

Chart of the Week | May 19, 2022
Macro Insights

Bonds Begin to Diversify Equity Volatility

  • With interest rates set to continue to rise off 2020 lows, core bonds have started to trade uncorrelated to overall equity markets with the Bloomberg US Aggregate Bond Index TR’s return of +0.58% and the S&P 500 Index’s return of -3.46% since 05/02/2022 through 05/16/2022.
  • The thematic and macroeconomic landscape remains unchanged with slower global growth, higher inflation, supply constraints and geopolitical tensions, illustrating that the tangible de-pegging of equities and core bonds may have some legs.
  • Thus, with equities likely to remain volatile throughout the remainder of the year amid macro uncertainty, traditional fixed income allocations (corporate bonds, etc.) and uncorrelated fixed income asset classes (legacy NARMBS, floating rates, etc.) appear to deliver portfolio equity diversity and uncorrelated return streams.
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Hunter Frey, Analyst
Hunter Frey, Analyst
Hunter Frey is an Analyst at Catalyst Capital Advisors, LLC and Rational Advisors Inc. covering all in-house equity strategies and an insider buying income-oriented strategy at Catalyst Funds. Mr. Frey received a Bachelor of Science degree in International Business with a focus in Spanish from Gardner-Webb University, Godbold School of Business, and is in pursuit of a Master of Business Administration in Economics and Finance from New York University, Stern School of Business.

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