Chart of the Month
Fixed income should resume diversification role
Rolling one-year correlation of S&P 500/US 10-year Treasury and US tightening cycles
When the Fed tightens, fixed income correlations tend to go up and stocks tend to go down. This correlation tends to reverse itself when the Fed stops tightening, as they’re expected to do soon. Going forward, fixed income should play a better diversifying role in client portfolios.
Past performance is not a guarantee of future results. Diversification does not ensure a profit or protect against a loss in a declining market. Source: Datastream | Chart data: 30 June 1988 – 19 June 2019
Stat of the Month
Sources: BlackRock Investment Institute, J.P. Morgan, and Refinitiv Datastream, 7/19.
Global Investment Strategy
from Nanette Abuhoff Jacobson
Active fixed-income approaches have frequently outperformed their passive counterparts, and often add value by aligning with an investor's objectives in ways index-tracking approaches may fall short.
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