Dynamic Markets, Agile Thinking

Bonds Take Center Stage

With the US Federal Reserve expected to implement rate cuts in 2024, investors may have timely opportunities to shift portfolios to longer-duration positions that can help manage portfolio risk. We believe bond market sentiment will also be subject to influences such as economic and inflation forecasts, energy pricing, unexpected climate events and regional conflicts.

Where can fixed income investors find compensation for risks?

At this late point in the investment cycle, it may make sense for fixed income investors to be positioned more defensively. Jonathan Duensing, head of fixed income at Amundi US, explains which market segments may provide adequate compensation for credit, liquidity, and structural risks.

Pockets of opportunity in fixed income markets

While investors should remain thoughtfully selective, we see attractive opportunities in fixed income markets including securitized assets, the financial sector, and high-yield allocations. Jonathan Duensing, head of fixed income and portfolio manager at Amundi US, explains why bonds have taken center stage, and where investors can find attractive relative value.

Keep an eye on last mile inflation

Central banks in developed economies continue to grapple with when to start normalizing local monetary policy. Now could be an interesting time for investors to strengthen their portfolios by extending the duration of their fixed income portfolios and raising credit quality and liquidity profiles while carefully weighing global opportunities.

Read our paper, Remain agile in bond selection, with an eye on last mile inflation

Bonds take center stage

For most of the last year, savers have been earning a reasonable return in cash. But how long can these compelling cash rates last? Historically, the answer has been: not very long. With history as a guide, we believe investors may benefit from locking in some of today’s historically elevated interest rates by moving out of cash and into short-term bonds.

Read our paper, Bonds take center stage

Why Short Duration Now?

In this environment, Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income Fund may offer investors an opportunity to pursue attractive income potential while limiting duration risk.

Amundi US multi-sector fixed income capabilities

The Amundi US multi-sector fixed income team believes that an active, value-oriented, total return approach to fixed income investing can deliver an attractive risk/reward profile over time. The team’s investment process combines top-down views and risk management with bottom-up valuation analysis and insights. We believe security selection and sector allocation are key sources of long-term excess return generation.

When the Fed cut rates – broad bond sector performance

An active approach to managing bond yield and duration – two essential contributors to a high-quality bond portfolio – can help investors pursue excess return.

bonds-take-center-stage

Source: Bloomberg (BBG) and Amundi US. Left table data as of dates shown. Right chart data as of 9/30/24. Data is based on past performance, which is no guarantee of future results. Sectors represented by the following indices: US IG - BBG Corporate Bond Index. Munis - BBG Municipal Index. US Treasuries - BBG US Treasuries Index. MBS - BBG Mortgage-Backed Securities Index.

Opportunities to Explore

Amundi US provides a full spectrum of bond solutions to manage the income portfolio in an evolving market:

Pioneer Multi-Asset Ultrashort Income Fund

Seeks a high level of current income to the extent consistent with a relatively high level of stability of principal.

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Pioneer Short-Term Income Fund

Actively managed for high level of current income to the extent consistent with a relatively high level of stability of principal with diversified exposure to short-term debt securities.

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Pioneer Bond Fund

Multi-sector bond exposure actively invested across a broad range of US dollar-denominated fixed income sectors.

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Pioneer Strategic Income Fund

A multi-sector bond fund that invests across a broad range of global fixed income sectors, including core US investment grade, non-investment grade, non-US country, currency and floating rate asset classes.

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Pioneer Securitized Income Fund

Invests predominately in high yield, or below investment grade collateralized securities and corporate obligations to seek attractive total returns.

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More Opportunities to Explore

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Global Opportunities Shift

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Consider Low- or Uncorrelated Allocations

Please visit our Mutual Fund page to find our full list of mutual funds.

Definitions:

Duration: A measure of the sensitivity of the price of a fixed income investment to a change in interest rates. Yields: The earnings generated and realized on an investment over a particular period of time.

Excess Return: The return from an investment above a specified benchmark.

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