We believe non-agency RMBS bonds will present a very attractive investment opportunity in 2023. Prepayment-sensitive assets (e.g., agency IOs) provide a particularly compelling diversification story due to the countercyclical nature of the sector, in our view. Our current base case
While investment losses are never easy, it is important to realize that losses exist only on paper until you sell your shares. That is why many financial advisors counsel their clients to maintain their share balances rather than sell at
In this paper, we offer quantitative analysis that builds a case for a long-term allocation to non-U.S. small-cap equity. We are often asked by consultants and institutional investors why they should allocate to non-U.S. small-cap strategies. Conventional wisdom is that
On the surface, the decision by the Federal Reserve Open Market Committee (FOMC) to increase the upper bound on the federal funds rate by 75 basis points (bps) at its June 15 meeting seems almost anticlimactic in hindsight. By that
Valuations were simply not sustainable The first half of 2022 was anything but pleasant for investors, especially those with exposure to the technology sector. Tech stocks across global markets experienced violent sell-offs, and tech indexes are now firmly in bear
Key takeaways TIPS can help investors maintain their purchasing power in inflationary periods, because their principal value adjusts with changes in the Consumer Price Index for All Urban Consumers, providing a real rate of return that exceeds that of nominal
In today’s environment, small-capitalization stocks in emerging markets (EM) offer compelling reasons for consideration. We believe this universe has big potential, may deliver consistent returns, and can provide diversification in portfolios. The case for active management in this space is
Q4 2021 | Fixed Income Outlook: Global financial markets were mixed during the third quarter. Fixed-income markets faced volatility from multiple directions, including the Federal Reserve’s announced intention to taper monthly bond purchases, the expiration of the U.S. federal debt
The difference between price and inflation The recent jump in inflation reflects an uneven recovery from the pandemic rather than a long-term shift U.S. job growth has been lower than expected even as demand for workers remains robust. Consumer prices
A dialogue with investors: At this time last year, we thought we were in the middle of the Covid-19 crisis. In retrospect, it was just beginning. During 2020, many investors and business leaders became amateur epidemiologists, intensely studying transmission curves
We are pleased to share our third annual assessment of sustainability and impact for Putnam Sustainable Leaders Fund and Putnam Sustainable Future Fund. Against the backdrop of the funds’ goals of long-term capital appreciation, we aim to generate excellent financial
Capital Markets Outlook – Q2 We have become accustomed to referring to financial and economic statistics in terms of where they stand “in the post-World War II period.” That changed abruptly as the COVID-19 pandemic swept across the world, disrupting
Putnam – Capital Markets Outlook As we enter the final quarter of the decade, the signals of late cycle behavior continue to grow louder. But, as the old trader adage says, “nobody rings a sell at the top.” We do not believe this
Putnam – Fixed Income Outlook Global growth has cooled in 2019 as trade conflicts have taken a toll on international manufacturing, investments, and financial markets. Despite multiple headwinds, the likelihood of a recession — while rising — remains relatively low
Q4 2019 | Fixed Income Outlook Global growth has cooled in 2019 as trade conflicts have taken a toll on international manufacturing, investments, and financial markets. Despite multiple headwinds, the likelihood of a recession — while rising — remains relatively
Global growth continues to cool under the weight of the ongoing trade dispute between the United States and China. Our central scenario is for growth to muddle along with risks pointed to the downside. Worries about a potential recession in
We believe low-beta equity opportunities can be found across all global markets and sectors. Investing in these opportunities with traditional low-beta strategies can incur unintended risks from significant country, sector, and duration exposures versus cap-weighted benchmarks. Actively managed strategies can
Putnam – The Macro Report Global growth is cooling as the trade war continues to erode business investment, manufacturing activity, and investor confidence. In July, the Federal Reserve cut interest rates for the first time since 2008; the preemptive move
The Macro Report | May 2019 Global economic growth in 2019 is showing signs of picking up amid recovery in the eurozone and China, the world’s second-largest economy. The prospect of a deeper slowdown in China has been one of
Securitized debt offers underlying fundamental diversification We believe investors should diversify their portfolios across the fixed income risk spectrum to seek to manage risk and optimize returns, and that securitized debt can play an important role in this framework. Within
Bonds rally as the Fed hits the pause button An inverted yield curve raises concerns about a U.S. downturn. The Federal Reserve’s dovish shift on interest rates has boosted Wall Street. China and the United States inch closer to finalizing
How resilient is the rebound? The start of 2019 brought a rebound for global equities. After a bruising fourth-quarter sell-off, stocks bounced back despite concerns over slowing economic growth and downward earnings revisions. The Federal Reserve’s decision to put rate
Bonds rally as the Fed hits the pause button An inverted yield curve raises concerns about a U.S. downturn. The Federal Reserve’s dovish shift on interest rates has boosted Wall Street. China and the United States inch closer to finalizing
A critical examination of assumptions, outcomes, and glide path specification This paper defines key assumptions, derived from empirical data, to deliver highly accurate and representative simulations of participant outcomes. The paper constructs an alternative glide path design that we believe
Global growth outlook cools amid higher interest rates and market volatility The outlook for global growth in 2019 has slipped because of rising real interest rates, trade tensions, and asset market volatility. The U.S. economy is likely to expand at
The upside of the downturn Equity investors worldwide greeted the new year with an array of heightened concerns. A difficult fourth quarter brought volatility and annual losses for many major indexes. Among the issues that contributed to the downturn were
A delicate balance Forecasting 2019 means interpreting the interactions between economic growth, interest rates, and risky assets. Global growth is slowing. In the United States, waning fiscal stimulus measures and higher rates will trigger the pace of expansion to moderate
Q1 2019 | Capital Markets Outlook As the S&P 500 Index teetered on the verge of a bear market at year-end, we fielded numerous questions about the prospects for an impending recession. Our answer is that we do not expect
The U.S. economy’s slow fizzle There are signs of weakness in major U.S. economic indicators, including home building and investments, raising concerns that one of the longest periods of economic growth in U.S. history may be coming to an end.
Equities face skepticism over rates and trade Even before equities sold off in early October following the spike in the 10-year Treasury yield, clouds were on the horizon.
Trade war and rising rates create headwinds for global economy The U.S. economy is poised to expand further this year, but growth will likely ease in 2019 China and the United States are locked in a spiraling trade war. We
Q4 2018 | Fixed Income Outlook The U.S. economy is poised to expand further this year, but growth will likely ease in 2019. China and the United States are locked in a spiraling trade war. We believe global yields will
The Macro Report The outlook for global economic growth is easing because of trade tariffs, weakness in emerging markets, and rising oil prices. In the United States, growth will remain steady this year but is expected to slow in 2019
Equity Outlook Q4 2018 While most world markets advanced in the third quarter, U.S. stocks saw their biggest quarterly gain in nearly five years, boosted by rising wages, low unemployment, continued economic growth, and positive investor sentiment despite an escalating
Traditional guaranteed investment contracts (GICs) can enhance the diversification, liquidity, and flexibility of stable value portfolios. Stable value strategies can pursue greater diversification by balancing exposures to traditional GICs and the bonds underlying synthetic structures. Traditional GICs can help lower
August 2018 After a long-term downward trend, we believe that the upward turn taken by interest rates in the second half of 2016 may continue. Many investors are over-exposed to interestrate risk in the form of duration, the central risk
Capital Markets Outlook During the second quarter, relatively little has changed with regard to the path of the Trump administration’s trade policy. A 25% tariff on $34 billion of imports from China is planned for July 6, and China is
Capital Markets Outlook During the second quarter, relatively little has changed with regard to the path of the Trump administration’s trade policy. A 25% tariff on $34 billion of imports from China is planned for July 6, and China is
The Macro Report | July 2018 The outlook for global growth is favorable — albeit less synchronized — for the remainder of 2018. We are starting to see some convergence in growth rates — especially between the United States and
The primary bond-fund benchmark — the Bloomberg Barclays U.S. Aggregate Index — is overexposed to interest-rate risk. As rates go up, portfolios pegged to this benchmark will likely suffer. After a long-term downward trend, we believe that the upward turn
The Macro Report May 2018 Our outlook contains some small but noteworthy shifts. Rising oil prices are expected to lift slightly the trajectory of inflation in the United States because of the pass-through to consumer prices. A stable economy and
Equity Outlook The reduction in the U.S. corporate tax rate will clearly provide a boost to profitability, but there are many more ancillary benefits for businesses worldwide. Japan and China offer a complex mix of opportunity and headwinds for equity
Fixed Income Outlook The U.S. economy is poised to remain solid in 2018. The risk of a trade war between the U.S. and China is now elevated. Eurozone growth is easing to a more reasonable pace.
Capital Markets Outlook At last, the first quarter delivered a 10% equity market correction — which commentators had feverishly awaited during 2017, as the market settled into a historic level of calm. The popular narrative of the recent correction focuses
The Macro Report President Trump in March proposed tariffs on an estimated $50 billion in imports from China, weeks after slapping tariffs on aluminum and steel. In April, China retaliated by imposing tariffs on U.S. imports. While there is low
Q2 2018 | Capital Markets Outlook At last, the first quarter delivered a 10% equity market correction — which commentators had feverishly awaited during 2017, as the market settled into a historic level of calm. The popular narrative of the
The Macro Report | March 2018 February saw a sharp reversal in risk appetite as investors shifted out of global equity and bond markets. Evidence of economic strength, including a tight labor market and rising wages in the United States,
The Macro Report | March 2018 February saw a sharp reversal in risk appetite as investors shifted out of global equity and bond markets. Evidence of economic strength, including a tight labor market and rising wages in the United States,
A critical examination of assumptions, outcomes, and glide path specification This paper defines key assumptions, derived from empirical data, to deliver highly accurate and representative simulations of participant outcomes. The paper constructs an alternative glide path design that we believe
We are seeing a return of the threat of protectionism in the United States. President Trump recently placed tariffs on imported solar panels and washing machines, sparking concern the country may prompt trade wars. This comes as the administration renegotiates
