Investment insights from Capital Group
Most investors had never faced a year as challenging as 2022
Sources: Capital Group, Bloomberg Index Services Ltd., Standard & Poor's. Each dot represents an annual stock and bond market return from 1977 through 2022. Stock returns represented by the S&P 500 Index. Bond returns represented by the Bloomberg US Aggregate Index. Past results are not predictive of results in future periods.
Both the market and Fed project lower rates in 2024
Sources: Bloomberg, Federal Reserve. The fed fund target rate shown is the midpoint of the 50 basis-point range that the Federal Reserve aims for in setting its policy interest rate. Market-implied effective rates are a measure of what the fed funds rate could be in the future and is calculated using fed fund rate futures market data.
3-month T-bill yields declined sharply following the Fed’s final hike in the last four cycles
Sources: Bloomberg, Federal Reserve. As of 30/6/23. Chart represents the average decline in 3-month Treasury bills starting in the month of the last Fed hike in the last four transition cycles from 1995 to 2018. Past results are not predictive of results in future periods.
After Fed hikes ended, long term results outpaced cash, with the first year contributing most
Sources: Capital Group, Morningstar. Chart represents the average returns across respective sector proxies in a forward extending window starting in the month of the last Fed hike in the last four transition cycles from 1995 to 2018 with data through 30/6/23. The 60/40 blend represents 60% S&P 500 Index and 40% Bloomberg US Aggregate Index, rebalanced monthly. Long-term averages represented by the average five-year annualised rolling returns from 1995. Past results are not predictive of results in future periods.
Market Volatility
European Equity
U.S. Equities
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Past results are not predictive of results in future periods. It is not possible to invest directly in an index, which is unmanaged. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.