The Case for Fixed Income in a Volatile World

Portfolio Manager Adam Bloch joins Asset TV for a fixed-income masterclass, discussing the current macro environment, finding relative value, and why today’s market may represent a once-in-a-lifetime opportunity for fixed-income investors.

July 11, 2025

Key Takeaways:

We expect rates to move lower while credit spreads remain relatively constrained given strong fundamentals and supportive technicals.
Bonds currently offer attractive yields, with potential upside if rates decline, creating strong total return opportunities.
We’re finding value in commercial asset-backed securities, particularly data centers and aircraft leasing, as well as Agency mortgage-backed securities.
The current environment may be a rare opportunity to add higher quality yield to fixed-income portfolios.

Investing involves risk, including the possible loss of principal. In general, the value of a fixed-income security falls when interest rates rise and rises when interest rates fall. Longer term bonds are more sensitive to interest rate changes and subject to greater volatility than those with shorter maturities. During periods of declining rates, the interest rates on floating rate securities generally reset downward and their value is unlikely to rise to the same extent as comparable fixed rate securities. High yield and unrated debt securities are at a greater risk of default than investment grade bonds and may be less liquid, which may increase volatility. Investors in asset-backed securities, including mortgage-backed securities and collateralized loan obligations (“CLOs”), generally receive payments that are part interest and part return of principal. These payments may vary based on the rate loans are repaid. Some asset-backed securities may have structures that make their reaction to interest rates and other factors difficult to predict, making their prices volatile and they are subject to liquidity and valuation risk. CLOs bear similar risks to investing in loans directly, such as credit, interest rate, counterparty, prepayment, liquidity, and valuation risks. Loans are often below investment grade, may be unrated, and typically offer a fixed or floating interest rate.

FEATURED PERSPECTIVES