Understand emerging markets opportunities and the American Century advantage.
By Rich Taylor & Joyce Huang, CFA - April 2019
Treasury yields rise. After rallying in March, Treasury yields increased in April, as better-than-expected economic data in the U.S., China and Europe helped ease investor concerns about global growth. The 10-year Treasury yield rose 10 bps to end the month at 2.50%, according to Bloomberg. The yield on the two-year Treasury note was unchanged at 2.27%, and the yield curve steepened.
Risk remains in favor. Positive fundamental and technical factors aided corporate bond returns, particularly in the high-yield sector. Gains among investment-grade corporates helped offset losses among Treasuries and keep the Bloomberg Barclays U.S. Aggregate Bond Index nearly flat for the month.
TIPS are on top. Within the U.S. Treasury market, TIPS generally delivered gains and outperformed nominal Treasuries. Even as current inflation remained muted, TIPS benefited from an uptick in longer-term inflation expectations.
Global yields increase. Stabilizing to improving global growth data helped push bond yields higher in Europe, the U.K. and Japan, and global bonds generally underperformed U.S. bonds.
EM bonds mixed. Emerging markets (EM) bond returns were mixed. Risk-on investing helped external bonds advance, particularly corporates, while a stronger U.S. dollar and rising U.S. interest rates pressured local-currency EM bonds, which declined.
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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