Strategic Fixed Income: End of the Cycle… Are We There Yet?

Fixed Income

Strategic Fixed Income: End of the Cycle… Are We There Yet?

With the markets finally coming round to the idea of the late-cycle stage in the economies, John Pattullo and Jenna Barnard, Co-Heads of Strategic Fixed Income, share their thoughts on the subject, expanding on the risks and opportunities arising from this theme in 2019.

Key Takeaways

  • The key theme in 2019 is based on the question: when and how will the cycle end?
  • While the managers believe we live in a much less inflation-prone world, they also believe there is a small but unlikely possibility of a sudden acceleration in inflation, leading to aggressive rate hikes by central banks.
  • The key opportunity is that it is late-cycle. If proved correct, as the cycle turns, there may be opportunities in quality government and investment grade bonds.
Key Themes
Divergence Theme Small Icon | Janus Henderson Investors
Income Theme Small Icon | Janus Henderson Investors

Market Divergence

Search for Income

FEATURED FUND

Developed World Bond Fund

Leveraging a wide range of fixed income securities, the Fund seeks income and total return while actively managing duration and credit exposure.

What else do our experts see for the year ahead?

All Eyes on the Fed
As the Fed risks executing on an overly aggressive tightening path, and the economic and credit cycles continue to progress, Portfolio Manager Seth Meyer highlights the importance of a nimble approach, in which capital can be dynamically allocated to the strongest risk-adjusted opportunities, regardless of fixed income asset class.

Going Global to Expand Income Potential
Co-Head of Global Bonds Nick Maroutsos explains why – despite the Fed’s history of dovishness – higher U.S. interest rates are likely here to stay and why bond investors need to react accordingly by taking measures such as looking globally for the most attractive risk-adjusted income opportunities.