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The Fed. The Whole Fed. And Nothing But the Fed.

Fourth Quarter 2020 

Despite challenges caused by COVID-19, Schroders still sees opportunity in the municipal bond market.

Insight from our sub-adviser, Schroders Investment Management
US Multi-Sector Fixed Income Team

 

 
  • In the wake of COVID-19, we now have a new buyer in the markets with a virtually unlimited balance sheet who is not averse to risk—the Federal Reserve.
  • Schroders sees opportunity in the taxable municipal bond market and is looking for corporate issuers who have strong balance sheets needed to survive the duration of this crisis and will likely come out stronger.
  • Schroders believes it can take advantage of the compensation the market is offering for risk as well as the technical drivers underpinning fixed income. 

 



Important Risks: Investing involves risk, including the possible loss of principal. Security prices fluctuate in value depending on general market and economic conditions and the prospects of individual companies. • Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall. • Obligations of US Government agencies are supported by varying degrees of credit but are generally not backed by the full faith and credit of the US Government. • Municipal securities may be adversely impacted by state/local, political, economic, or market conditions; these risks may be magnified if the Fund focuses its assets in municipal securities of issuers in a few select states. 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 Fund may have high portfolio turnover, which could increase its transaction costs and an investor’s tax liability.

The views expressed herein are those of Schroders Investment Management, 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. They should not be construed as research 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 Investment Management or Hartford Funds.

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