After a year of solid performance in 2021, fixed income has experienced significant drawdowns in 2022 amid increasing inflation and the most aggressive Federal Reserve (Fed) monetary tightening policy in decades. Fears and concerns about inflation, the Fed’s rate-hiking cycle, and a looming recession will continue to drive valuations. However, a difficult year in the markets has created opportunities for value-oriented fixed-income investors.
Important Risks: Investing involves risk, including the possible loss of principal. • Fixed-income security risks include credit, liquidity, call, duration, event and interest-rate risk. As interest rates rise, bond prices generally fall.• US Treasury securities are backed by the full faith and credit of the US government as to the timely payment of principal and interest. • Municipal securities may be adversely impacted by state/local, political, economic, or market conditions. Although municipal securities are exempt from federal income taxes, investors may be subject to the federal Alternative Minimum Tax as well as state and local income taxes. Capital gains, if any, are taxable. • Mortgage-related and asset-backed securities’ risks include credit, interest rate, prepayment, and extension risk.
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The views expressed herein are those of Schroders Investment Management (Schroders), are for informational purposes only, and are subject to change based on prevailing market, economic, and other conditions. The views expressed may not reflect the opinions of Hartford Funds or any other sub-adviser to our funds. The opinions stated in this document include some forecasted views. Schroders believes that they are basing their expectations and beliefs on reasonable assumptions within the bounds of what they currently know. The views and information discussed should not be construed as research, a recommendation, or investment advice, nor should they be considered an offer or solicitation to buy or sell any security. This information is current at the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Schroders or Hartford Funds.
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