2018 Multi-Asset Outlook: Can the Party Go On?
1 Purchasing Managers’ Index (PMI) is an indicator of the economic health of the manufacturing sector. A reading above 50 signals economic expansion; below
50 signals contraction. Past performance is not a guarantee of future results. Indices are unmanaged and not available for direct investment.
2 Duration is a measure of the sensitivity of an investment’s price to nominal interest-rate movement.
3 Dispersion is a statistical term describing the size of the range of values expected for a particular variable.
4 Gross Domestic Product (GDP) is the monetary value of all the ﬁnished goods
and services produced within a country’s borders in a speciﬁc time period.
5 Capital expenditure, or capex, are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.
6 Price/Book is the ratio of a stock’s price to its book value per share.
7 EBITDA (Earnings Before Interest, Taxes, Deprecition, and Amoritization) is a measure of a company’s earning power from ongoing operations, equal to earnings before deduction of interest payments, income taxes, depreciation, and amortization. EBITDA excludes income and expenditure from unusual, non-recurring or discontinued activities.
All investments are subject to risk, including the possible loss of principal. Foreign investments can be riskier and more volatile than U.S. investments due to the adverse effects of currency exchange rates, differences in market structure and liquidity, as well as political and economic developments in foreign countries and regions (e.g., “Brexit”). These risks are generally greater for investments in emerging markets. Small- and mid-cap securities can have greater risk and volatility than large-cap securities.
Fixed Income risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall; these risks are currently heightened because interest rates are at, or near, historical lows. Investments in high-yield (“junk”) bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. Bank loans can be difficult to value and highly illiquid; they are subject to credit risk and risks of bankruptcy and insolvency. Municipal securities may be adversely impacted by state/local, political, economic, or market conditions. Investors may be subject to the federal Alternative Minimum Tax as well as state and local income taxes. Capital gains, if any, are taxable. The value of inflation-protected securities generally fluctuates with changes in real interest rates, and the market for these securities may be less developed or liquid, and more volatile, than other securities markets. U.S. Treasury securities are backed by the full faith and credit of the U.S. government as to the timely payment of principal and interest. Commodity investments are subject to additional risks. Diversification does not ensure a profit or protect against a loss in a declining market.
The views expressed here are those of Nanette Abuhoff Jacobson. They should not be construed as investment advice. They are based on available information and are subject to change without notice. Portfolio positioning is at the discretion of the individual portfolio management teams; individual portfolio management teams and different fund sub-advisers may hold different views and may make different investment decisions for different clients or portfolios. This material and/or its contents are current as of 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 Wellington Management or Hartford Funds.