For investors in search of a way to boost income and diversify their bond portfolios, now may be the time to consider what local-currency emerging-market bonds offer.
We project solid global economic growth into 2018. The US should continue to raise rates gradually, while tapering of asset purchases moves onto the European Central Bank's agenda in the second half of this year.
After weathering the global financial crisis and an era of heavy regulation, the US banking sector has gotten what looks to be a clean bill of health. We think this opens a lot of possibilities for equity investors.
One of the biggest challenges for bond investors today is keeping income flowing without taking too much risk. We think a balanced barbell approach can help.
Illinois’s fiscal woes, shaped by years of political gridlock, culminated in a rating downgrade to BBB– on June 1. A downgrade to junk is possible. But Illinois could recover its footing, should legislators muster the political will to work together. We know it can be done, because of California’s example.
Economic insecurity, social insecurity and political ineffectiveness: these developments have fed a resurgence of populist policies in many regions of the world. We think there’s potential for major impacts on global capital markets.
It’s been a really good year for equities so far. Paradoxically, this is sowing the seeds of anxiety. Valuations are higher, so people are worried about a correction. Subdued volatility has stoked fears of renewed turbulence.
US growth stocks surged in the first half of 2017, fueled by mega-cap technology companies. Active managers of growth portfolios have done especially well, reinforcing the case for stock-picking strategies.
Disruptive forces are wreaking havoc across the global business world. But not all disruption is fatal. Lots of companies are facing the threat—and thriving. We think they deserve more credit than investors are giving them.
MSCI has announced that China A-shares will be included in its emerging-market (EM) index next year, as we anticipated. Now, global equity investors need to consider how to access the vast universe of stocks traded onshore in China.
Rising interest rates. Stretched valuations. Populist politics. These are some of the challenges bond investors face today. They’re also reminders of why it’s so important to manage interest-rate and credit risk in an integrated way.
Populism is here—and it isn’t going away. The ideology can come from either side of the political spectrum, and it can have a big impact on policy, the macroeconomic landscape and—ultimately—how we invest today.
Passive investing strategies continue to attract big money. But think carefully before choosing to track a benchmark in emerging markets (EM). Active managers offer several clear benefits for equity investors in the developing world.
Healthcare continues to generate political controversy. So should investors stay away? Absolutely not. What’s important is to target companies that are positioned to deliver long-term growth no matter what happens to the US healthcare system.
On the surface, passive municipal ladders seem like a sensible investment. Simple. Easy. Cheap. But the numbers don’t lie.
May’s labor-market report disappointed, with every meaningful indicator lower than expected and down from last month. But we don’t believe it’s weak enough to stop a June rate hike or knock the Fed off track.
Political noise emanating from Washington has prompted fresh concerns that a US equity market correction may be looming. But have no fear: the market often takes a leg down, only to bounce back quickly.
Stock market volatility is unusually low these days. Does that mean investors are complacent? We don’t think so. In fact, some risk indicators suggest market participants may be less relaxed than they seem.
Rising interest rates make bond investors nervous. But purging your portfolio of interest-rate risk can backfire—even in a rising-rate environment. There’s a better way to balance risk and return.
Investors are wary about US stock multiples. But elevated valuations of high-growth stocks may be deceiving. Growth overachievers that can deliver persistent fundamental strength often make a mockery of their short-term valuations in hindsight.
Volatility is remarkably low today, but it’s not likely to stay that way. Alternatives have the potential to provide diversification and reduce risk when markets get stormy again. But what’s the best way to design an alternatives allocation?
The defined contribution (DC) community has been buzzing about lifetime-income products lately. It’s a topic that’s been dormant for several years, but there are good reasons for renewed interest.
US inflation bounced back last month, but by less than expected. The data should support two more rate hikes in 2017, but if inflation doesn’t pick up, it may impact plans for more aggressive policy tightening down the road.
The recent stall-out in US bond yields has thrown equity investors into a funk. But, in our view, it’s a pause that refreshes. Remember, there are still powerfully supportive forces in play for the economy and stocks.
Driverless cars may be the wave of the future. But when it comes to bond investing, it’s best to keep your hands on the wheel. Anything less could do serious damage to your fixed-income portfolio.
China A-shares could shortly be included in a key international benchmark for the first time—in a way that highlights smarter efforts by the West to help China integrate fully into global markets.
It’s hard to say how healthcare reform will affect the broad municipal bond market. But any new law with the potential to cause millions to lose insurance would be a bitter pill for hospitals. Investors should tread carefully.
Financial markets will welcome the election of centrist, pro-European Emmanuel Macron as France’s next president. Now that Europe has avoided a major political upset, all eyes will be on the ECB and its next move.
In an interview, AB’s new US Senior Economist, Eric Winograd, explains why he expects the US economy to continue growing and the Fed to raise rates two more times this year. He also highlights two risks: populism and protectionism.
With the S&P 500 Index touching new highs, where’s the US equity market heading? Our US portfolio managers addressed five big questions that are on investors’ minds about valuations, opportunities and risks in the market today.
Investors in European stocks are facing multiple sources of risk. Applying the mindset of strategic business owners can help tune out the noise and sharpen investors’ focus on more resilient sources of return potential.
Proposed US tax cuts—if they happen—would be a nice boon for corporate bottom lines. But for most companies, the boost to underlying earnings power would likely be fleeting. To find tax-reform winners, look for the exceptions.
More and more investors are globalizing their bond portfolios these days—with good reason. But when it comes to reducing risk, active management is essential. The French presidential election is just one reason.
Financial markets welcomed the result of the first round of the French elections on Sunday. Yet voting patterns and the political reality facing the next French president leave much to ponder.
British Prime Minister Theresa May has called a snap election on June 8. With only a slim majority in parliament, she hopes to strengthen her position ahead of complex Brexit negotiations.
With inflationary pressures under control and external balances improving, many emerging-market (EM) countries are working on the next item on their to-do lists: reigning in fiscal deficits. That’s good news for emerging equities, dollar-denominated bonds and local-currency debt.
With the US beginning to normalize official short-term interest rates, global monetary policy is becoming less accommodative overall. Meanwhile, the global economy seems poised for its best year of growth since 2010. Explore the factors driving our assessment in the latest global cyclical outlook.
Though the “Trump bump” helped, the year-old winning streak in smaller stocks owes far more to the spirited US economy. This rally has firepower, but we’d be choosy in riding the next leg higher.
Minutes from the Federal Reserve Open Market Committee (FOMC) March meeting highlight key aspects of the committee’s thinking, including the committee’s intent to reduce its balance sheet gradually over time.
Global equities enjoyed a strong start in 2017, driven by optimism about economic growth in the US and Europe. But political risk and valuation concerns undermined confidence toward quarter-end, highlighting a key dilemma facing investors this year.
Despite uncertainty about global politics and policy, stock markets are soaring and volatility is low. Does this mean it’s time for investors to double down on growth-oriented assets? Not necessarily.
Britain’s divorce from the EU is underway, but the complex negotiating process has just begun. We believe a mutually beneficial deal can be reached—as long as both sides focus on the risks of failure.
Passive global bond investors may be getting more than they bargained for—in terms of risk, that is. That’s because lower-yielding debt is overrepresented in the benchmark, providing less buffer—and passive investing locks other types of risk into the portfolio.
Responsible investing means different things to different people. There are pros and cons to each method of incorporating environmental, social and governance factors into investment portfolios.
As interest rates nudge higher, many municipal bond investors worry about the impact on their portfolios. Muni credit, which holds its value better when rates rise, could be the solution.
Emerging markets often lag behind developed countries when it comes to technology adoption. But things are changing. Developing-world countries and companies are rapidly becoming Internet trendsetters—especially in online retail and digital payments.
Yield-hungry investors are quickly regaining their taste for deeply subordinated bank bonds. Some of these securities offer appetizing yields, but it’s important not to overindulge.
President Trump’s administration wants US multinationals to bring offshore manufacturing and jobs back home. Apple’s iPhone is one example, uncovered by our research, of the complexities involved in dismantling international supply chains.
