Monthly Net Rating Change
Monthly Net Rating Change The credit ratings upgrade cycle continued in September, which is good news for high yield investors. Image: BofA Global Research
Monthly Net Rating Change The credit ratings upgrade cycle continued in September, which is good news for high yield investors. Image: BofA Global Research
Deflation Assets vs. Inflation Assets Is the 40-year bull market in bonds over? Deflation Assets: government bonds, U.S. investment grade, S&P 500, U.S. consumer discretionary, growth and US high yield.Inflation Assets: TIPS, EAFE, U.S. banks, value and cash. Image: BofA Global Investment Strategy
Year to Date Fund Flows Many investors placed their money in US money market funds and high yield ETFs. Image: BofA Global Research
Inflation Assets vs. Deflation Assets The leadership remains deflationary, and the laggards remain inflationary. Deflation assets: government bonds, U.S. investment grade, S&P 500, U.S. consumer discretionary, growth and US high yield. Inflation assets: TIPS, EAFE, U.S. banks, value and cash. Image: BofA Global Investment Strategy
The Performance of “Deflation Assets” vs. “Inflation Assets” Interesting chart showing the performance of “Deflation Asset” vs. “Inflation Assets” since 1960. “Deflation Assets”: Government Bonds, US Investment Grade, S&P 500, US Consumer Discretionary, Growth and US High Yield “Inflation Assets”: TIPS, EAFE, US Banks, Value and Cash Image: BofA Merrill Lynch
Bonds Flows The persistent flow into global bond ETFs highlights a shift in investor strategy, prioritizing fixed income assets as a hedge against market volatility and as a means to secure higher yields. Image: J.P. Morgan
U.S. Dollar vs. Japanese Yen (USD/JPY) When yields on U.S. Treasury bonds are higher than those on Japanese government bonds, it can lead to a weakening of the Japanese yen relative to the U.S. dollar. Image: BCA Research
FMS Investors – Net % Expecting Lower Long-Term Rates Only 38% of FMS investors expect bond yields to decrease, while the majority anticipate stable or potentially higher bond yields. Image: BofA Global Fund Manager Survey
Cumulative Asset Flows in % of AUM Terms In 2023, there has been a notable trend of strong inflows into “risk-free” assets, indicating a growing preference for low-risk investment options in an environment of higher yields. Image: Deutsche Bank Asset Allocation
Importance of Macro Driver in Explaining Returns Higher real 10-year UST yields can potentially lead to a decrease in U.S. stock returns, but other factors should also be considered. Image: Goldman Sachs Global Investment Research