/institutional/perspectives/portfolio-strategy/fixed-income-outlook-second-quarter

Managing Through a Persistent State of Heightened Volatility

In the second-quarter 2016 report, our fixed-income team discusses where we’re finding relative value amid market volatility.

May 24, 2016


Report Highlights

  • We expect the heightened first quarter volatility will continue into the summer. This will create opportunities to allocate to positions overly discounted due to unwarranted fears of recession or financial crisis.
  • Macroeconomic factors, such as solid but unspectacular economic growth, a cautious Fed, and improving oil market supply/demand fundamentals, underpin our generally positive outlook for U.S. credit.
  • A stabilized oil market should support credit performance of issuers in the energy sector. Our outlook applies primarily to the investment-grade corporate bond market, but it should also support select high-yield issuers as well.
  • Structured credit continues to have a significant weighting in our strategies based on our relative value analysis across fixed-income markets.
  • We expect the Fed to raise rates once in 2016. In our view, policymakers will be watching Chinese growth, the “Brexit” vote in June, and the U.S. presidential election in November.
  • Our investment process, which is designed to avoid cognitive biases, snap judgments, and other decision-making pitfalls, provides a foundation for disciplined, systematic, and repeatable investment results that does not rely on one key individual or group.
 
 
 

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Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Fund Management (Europe) Limited, Guggenheim Partners Japan Limited, GS GAMMA Advisors, LLC, and Guggenheim Partners India Management.