Understand emerging markets opportunities and the American Century advantage.
By Rich Taylor & Joyce Huang, CFA - June 2019
Treasury yields tumble. U.S. Treasury yields continued to fall in June, marking the third consecutive quarter of declines. Since the end of September 2018, the yield on the benchmark 10-year note has fallen more than 1 percentage point amid a stretch of safe-haven buying. Investor concerns about global growth and trade drove the flight to quality. Meanwhile, the Fed’s policy pause and dovish demeanor helped push short-maturity Treasury yields sharply lower.
U.S. bonds advance. Declining Treasury yields helped lift the broad U.S. bond market in June and for the second quarter, and all investment-grade sectors delivered solid gains.
Corporates rally. Investment-grade corporates rallied in June, capping a strong second quarter. Declining yields and still-solid U.S. corporate fundamentals fueled the gains. High-yield corporates rebounded in June, aided by a rallying stock market and rising oil prices. June’s gains helped fuel positive results for the quarter, but the asset class underperformed investment-grade corporates.
Global bonds outperform. Slowing global growth, trade tensions, Brexit uncertainty and dovish central bank policy pushed non-U.S. developed market yields lower. Global bonds outperformed U.S. bonds in June and for the quarter. Falling U.S. yields and expectations for Fed easing aided emerging markets (EM) bonds, particularly in June. A declining U.S. dollar also helped.
Notes from the Global Fixed Income Desk
Monthly analysis of the global bond market.
Abdelak Adjriou, discusses his view on the current investment environment and the benefits of allocating into emerging market debt.
In this highlights clip of a recent Asset TV Institutional Masterclass panel, Abdelak Adjriou discusses mispriced risks, increasing oil prices, central bank normalisation, and total return approaches in emerging markets debt.
After a reprieve in July, volatility has returned to emerging markets assets, thanks mostly to tumult in Turkey.
August 14, 2018
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
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