Investment insights from Capital Group
Pause, skip or pivot? Investors expect interest rates to decline
Sources: Capital Group, Bloomberg Index Services Ltd., Refinitiv Datastream, U.S. Federal Reserve. Fed funds target rate reflects the upper bound of the Federal Open Markets Committee’s (FOMC) target range for overnight lending among U.S. banks. The market-implied rate is based on price activity in the fed funds futures market, where investors can speculate on where they think rates will be at a future point in time. As of 14 June, 2023.
Strong income may persist as bond yields stabilise at elevated levels
Sources: Bloomberg Index Services Ltd., RIMES. As of 31 May, 2023. Sector yields above include Bloomberg Global Aggregate Index, Bloomberg Global Corporate Investment Grade Index, Bloomberg Global Corporate High Yield Index, and 50% J.P. Morgan EMBI Global Diversified Index/50% J.P. Morgan GBI-EM Global Diversified Index blend. Yields shown are yield to worst. Yield to worst is a measure of the lowest possible yield that can be received on a bond that fully operates within the terms of its contract without defaulting. Past results are not predictive of results in future periods.
Recession risks present opportunities in yield curve positioning
Sources: Capital Group, Bloomberg Index Services Ltd., National Bureau of Economic Research, Refinitiv Datastream. As of 31 May, 2023.
Improved quality may lead to fewer defaults in high-yield bonds
Sources: Bloomberg Index Services Ltd. As of 31 December, 2022.
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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.