US Fixed Income: Best house in the worst neighborhood?

As you are aware, we materially added risk to the portfolios earlier this year and they remain biased to more strength in markets despite the significant recovery in valuations. We believe the supportive policy mix, gradually improving economy and global grab for yield means that higher-quality US assets, such as investment grade credit and taxable municipals, will continue to benefit from a positive technical backdrop. While the opportunity is not at the giveaway levels we saw in March and April, we need to operate in the environment that monetary and fiscal authorities have created. While that may create longer-term distortions, in the short term it is one where demand for yield and risk in fixed income is likely to persist.

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.