Long the Short End of the Curve
With shorter-maturity yields increasing as of late, the front end of the yield curve (shorter-maturity fixed income) may be offering an enticing trade-off between risk and reward, and a potential place for investors to play defense. Sector selection and yield curve positioning decisions are difficult in dynamic rising rate environments, but with scenario analysis, we can begin to determine how portfolios may perform in this challenging market.
The Bloomberg Barclays U.S. Aggregate Bond Index (“the Aggregate”), the most widely used high-quality bond benchmark, serves as a good example of the price weakness that has sur... Read more