Over the past three decades, the Federal Reserve has raised the official short-term rate when the US economy has shown signs of overheating. When the Fed moves, savvy bond investors also move—toward opportunity.
As the popularity of passive investing continues to gain momentum, take pause to think about a lesson from baseball. The question is: what kind of equity lineup creates a winning team?
Commodities haven’t been kind to investors in recent years. But we believe that shifting the frame of reference away from underlying price trends of metals and raw materials can reveal surprising opportunities in select commodity stocks.
The market for financial hybrid securities is growing as banks worldwide implement stringent new capital rules. But not all hybrids are alike, so investors can’t afford to take a one-size-fits-all approach.
US :: The sharp and sudden sell-off in equity markets worldwide raises growth fears once again. But the economic foundation in the US today is much stronger and broader than it was during prior equity sell-offs. This leads us to conclude that the recovery is on a sustainable path—and could even tolerate the normalization of official interest rates.
Europe :: Although the global backdrop has darkened, we expect the euro-area recovery to remain on track, helped by low oil prices and supportive monetary conditions. The ECB is unlikely to provide fresh stimulus at this stage. But persistent downward pressure on inflation should keep the central bank in dovish mode and could make additional asset purchases after September 2016 a real possibility.
Asia :: Many Asian economies have seen their growth rates slow toward, or below, their potential growth rates in recent years. Moreover, the potential growth rates themselves have also slowed owing to changes in demographics, investment trends and productivity growth. As a result, investors should be braced for surprises, for instance, in monetary policy or the relative value of currencies in the region.
Latin America :: Falling commodity prices, subdued economic growth and the prospect of higher US interest rates have pressured currencies throughout emerging markets. Persistent currency weakness is bound to feed through to domestic prices eventually. That will push central banks toward tighter monetary policy.
Alpha Fund Managers has become the initial investor in the AllianceBernstein Global Equities Fund, adding the fund to their portfolio.
The AllianceBernstein Managed Volatility Equities Fund has received a ‘Recommended’ rating from investment research house Lonsec.
Tassos Stassopoulos, who manages the AllianceBernstein Emerging Consumer Fund, discusses the strategy with the Insto Report