Bond Investing, Beyond Yield— A Deeper Dive

Bond Investing, Beyond Yield-- A Deeper Dive

With a more sophisticated understanding of the bond landscape, you can make empowered decisions to help you grow your portfolio.

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Develop an Ongoing Strategy with Fidelity

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Education on the dimensions of bond investing

Resources to help inform and assist in selecting bond investments

Insights for making more prudent and informed decisions

Common Questions

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How many of you can describe the risk/reward of different types of bonds?

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How many understand how the rate cycle impacts prices and yields of bonds?

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How many know the different bond strategies to help manage your wealth?

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Viewing Fidelity Bond Tools & Strategies

Understanding Macroeconomic Trends

Exploring Three Dimensions

of Bond Investing

Investing in Corporate & Municipal Bonds

Today's Agenda

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Understanding Macroeconomic Trends

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Key Market Drivers

The Economy Since 2007

U.S. Treasury Yields Markets Reaction to Easing and Tightening

Key Market Drivers

Climbing the wall of worry.... After a punishing end to 2018 when most benchmark indices ended the year in negative territory, 2019 began with a strong bounce-back supported by the Federal Reserve's pivot in language and later a reversal in interest rate policy.

Global GDP growth weakened by US-China trade war / tariffs, which continued to disrupt global supply chains and dampen capital investment. However, the services sector remained resilient as consumers enjoyed low unemployment, real wage / income growth, modest increases in home values and favorable financial conditions.

The yield curve inverted in the summer, in a signal that monetary policy was too tight. Meanwhile, the amount of bonds globally with negative yields reached new heights of over $17 Trillion.

The Federal Reserve switched from "normalization" to "mid-cycle adjustment", as their 2018 forecast of around three more rate increases in 2019 were first suspended then moved into reverse with three 25bps rate cuts YTD.

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Trends:

The Economy Since 2007

Key Market Drivers of Post Recession and Extended Cycle Thru 2019

(K)

10%

500

5%

250

0%

-5%

-10%

-15%

-20%

2007

2008

2009

Unemployment Rate (%)

3.00%

2.00%

1.00%

0.00%

2010

2011

2012

2013

U.S. 2-Year Treasury Yield (%)

2014

2015

2016

Core CPI YoY (%)

0

-250

-500

-750

-1000

2017

2018

2019

Private Payrolls (right-axis)

In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Any fixed-income security sold or redeemed prior to maturity may be subject to loss.

Sources: Bloomberg, November 2019

Past performance is no guarantee of future results.

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