Global Perspectives

  • Federal Reserve Sees a “Transitory” Rise in Inflation
    Longer-term U.S. Treasury yields have been rising alongside inflation expectations. Just how transitory an expected inflation “pop” proves matters as the economy reopens amid a gusher of fiscal stimulus.
  • Keeping Portfolio Balance in Election-Driven Market Volatility
    Electoral surprises spur stock and bond market turbulence, but sensibly diversified and balanced portfolios don't depend on political outcome.
  • Accounting’s Mistreatment of Intangible Assets Distorts Equity Market Valuations
    Intangible assets comprise some four-fifths of S&P 500 companies' total value, but they don't show up in balance sheet and valuation analysis unadjusted. About that growth-to-value market rotation…

Investing is inherently complex. U.S. Treasury yields far below longer-term averages and compressed credit market spreads make fixed income challenging. Equity can generate attractive returns, and considerable volatility. Market Insights is Thornburg’s window into how we think about risk, reward and the myriad factors that drive risk-adjusted returns.

Don’t Fight the Fed, as the Fed Fights Coronavirus
The Fed chopped its key rate after equities and bond markets tanked last week. The move risks fueling already frothy risk asset prices amid weakening global growth due to COVID-19, which has badly disrupted global supply chains and increasingly damped some services industries.
Market Selloff Goes Viral, Injecting More Value into Prices
Coronavirus-induced market volatility is another in a long string of blows to the global economic recovery. But investors should look through the disruptions for free-cash-flow companies with healthy balance sheets and resilient, if not robust earnings.
Parsing Long/Short Equity Liquid Alts Performance, Fees and Net Exposures
Investors interested in long/short equity mutual funds would be well advised to consider more than their much-more competitive fees vs. private hedge fund peers. To genuinely hedge the long components of a portfolio, look for lower net long exposures in a long/short equity allocation, and added value on the short side even in rising equity markets.
Guess What Delivered in Spades in Thornburg’s Internal 2017 Global 3 Stock/Security Competition?
At the beginning of every year, a number of investment professionals at Thornburg voluntarily place their informal, internal-only bets on which three securities—from stocks to currencies or other financial assets—might together produce the best beta-adjusted returns in the year ahead. In 2017, the winner was Sean Sun, whose three picks included bitcoin. The cryptocurrency skyrocketed last year, of course, helping Sean win the prizeless competition by a wide margin.
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