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Bonds don’t always diversify equity risk

With global bond yields back near the low end of recent ranges, it’s an opportune time to revisit a theme that’s relevant to portfolio construction today – the bond vs. equity correlation.

Credit is the Canary

Following last week’s meeting of the US Federal Reserve (FED), markets have become increasingly concerned that the FED is making a policy mistake in continuing to increase interest rates.

Conventional fixed income is not doing its job

Conventional portfolio construction assumes that governments bonds will diversify equity risk. The theory is that when equities fall, bond yields decline, resulting in capital gains on bonds that help offset equity losses. The problem is that it’s not working that way in practice.

Volatility strategies are reliable risk diversifiers

The large and liquid universe of global interest rate options offers an impressive set of tools from which volatility strategies can be constructed. This article discusses how volatility strategies are reliable risk diversifiers.

Investment Grade Credit Relative Value

Investment grade (IG) credit has been one of the worst performing asset classes so far this year, and its largest segment – USD IG credit – has been the worst hit.

It’s time to MOVE

Two charts we are watching closely and what they mean to us and investors.