Rising Rates? Keep the TIPS, Leave the Duration

Treasury Inflation-Protected Securities (TIPS) have been popular in recent years with investors worried about inflation, and returns have been strong. But TIPS have benefited from a long bull market for bonds and high interest-rate sensitivity. This could be a problem ahead—unless investors do something about it.

read more

Emerging-Market Currency Returns: Fact vs. Fiction

By Paul DeNoon (pictured) and Kenneth Colangelo Emerging-market (EM) currencies have long been a popular investment theme. It’s commonly assumed that attractive returns can be earned from the appreciation of EM currencies versus the dollar. The truth is a bit more complicated.

read more

Japan: Firing the Third Arrow

Japanese Prime Minister Shinzo Abe’s ability to implement his agenda is politically unfettered. But can he deliver, and will his policies work? We remain cautiously optimistic.

read more

Municipal Bonds: Equipped to Weather Rising Rates

Muni bonds suffered a rout recently when anxiety over the Fed’s taper of bond buying roiled fixed-income markets, leaving many investors wondering where to turn. As it turns out, munis have historically been effective shock absorbers. We believe that, given the right positioning, munis can help weather rising rates.

read more

ECB’s Attitude to Portugal Raises Questions about Bond-Purchase Programme

Political upheaval in Portugal has thrown the spotlight on the European Central Bank’s (ECB’s) bond-purchase programme, known as Outright Monetary Transactions (OMTs). Many are asking whether the ECB is ready to support the market if yields rise further. And if not, why not?

read more

Is Inflation Really Gone Forever?

Recent movements in asset prices suggest that markets have forsaken any possibility of an inflation outbreak in the next decade. We believe that view is far too sanguine.

read more

Concerned About Rising Rates? Add Ballast by Going Global

A US-only bond investor is affected by one business cycle, one yield curve and a single monetary policy. As long as rates were falling, that seemed like a good thing. Not so these days.

read more

Triangulating a Truer Course Through Emerging Markets

Where can you find a car market which will double in size in the next five years? Brazil and Russia might be obvious places to look, but would you have expected Chile, Colombia, Ukraine and Vietnam? Picking the next big themes in emerging consumer markets is even harder than in the well-researched developed world. To [...]

read more

Last Call to Take Advantage of Ultralow Rates for GRATs?

 Tara Thompson Popernik (in photo) and Stephen S. Schilling US investors interested in establishing a “zeroed-out” Grantor Retained Annuity Trust (GRAT) would benefit from completing their transactions before rising interest rates diminish its potential value—preferably before the end of July.

read more

Opportunity Knocks for Mortgage Investors

We don’t usually think of rising rates as being good for homeowners. That may be because we’re accustomed to thinking of financing (and refinancing) as the key to reviving sagging housing markets. And it’s true that financing availability remains tight, at least by historical standards, and isn’t going to get looser with rising rates.

read more

Archives by Month:

Archives by Subject: