Bond Market Resiliency Through Geo-Political Threats

By John Lovito - October 31, 2017

If I had to choose one word to describe the market during 2017, I’d say “resilient.” That’s notable because there were two major disruptions that could have resulted in prolonged volatility: the French elections and the Korean peninsula tensions.

Fortunately, the market bounced back quickly and low volatility has been the primary story this year. And in fact, we don’t currently see any change on the horizon—at least not in the short term. That’s why we’re starting to add a little more risk to our portfolios. One thing we still have a keen eye on is inflation. Will it continue being benign? Are the faint blips on the radar just that, or are they indicators that global inflation is starting to pick up?

In this quarter’s update, I dive into the three markets with the most risk for aggressive monetary policy: the U.S., the European Central Bank and the Bank of England. Where do we see the biggest risk, and what does it mean as we head into 2018?

John Lovito
John Lovito
  • Related Articles
  • More From Author

Is There Still Value in High Yield? Get an Insider’s View on Valuations

NCRAM Chief Investment Officer David Crall talks about investing for high income in today's market.

Emerging Markets Debt: A Return to Normal

Sr. Portfolio Manager Margé Karner sees attractive options for active managers headed into the second half of 2018, despite volatility.

Emerging Markets Debt: On the Heels of a Goldilocks Year

Will 2018 be another positive year for Emerging Market Debt? VP & Sr. Emerging Market Debt Portfolio Manager Marge Karner believes the landscape looks constructive, but there are potential concerns about complacency and valuations becoming stretched.

    Rising Debt and Deteriorating Credit Quality Expose Potential Risks of Index Investing

    As the global economic cycle matures, certain risks inherent in fixed-income investing will become more apparent.

    Fixed Income: A Defensive and Patient Playbook

    The first quarter of 2018 reminded markets that volatility is a risk. In this quarter’s outlook, SVP & Sr. Fixed Income Portfolio Manager John Lovito provides insight into how volatility prompted his team to pivot, and he also shares into his thoughts around liquidity, trade wars and rate hikes.

    Bond Market Resiliency Through Geo-Political Threats

    In this quarter’s update, Sr. VP and PM John Lovito dives into the three markets with the most risk for aggressive monetary policy.

      Generally, as interest rates rise, bond prices fall. The opposite is true when interest rates decline.

      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.