Bond Market Turbulence Is Real – So Is the Opportunity
Explore how our active managers seek to navigate volatility with timely perspectives across municipal, high yield, and multi-sector strategies. Your guide to positioning portfolios with purpose starts here.
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1 Utilize the Entire Fixed Income Toolkit - Holdings data as of [Date] and are subject to change on a daily basis. MacKay Shields as of [Date]. ABS = Asset-Backed Securities; CMBS = Commercial Mortgage-Backed Securities; RMBS = Residential Mortgage-Backed Securities.
2 A Compelling Case for Bonds in Today’s Environment – Bloomberg, ICE Data. Data as of [Date]. Corporates = Bloomberg U.S. Corporate Bond Index; High Yield = Bloomberg U.S. Corporate High Yield Bond Index; Agency RMBS = Bloomberg U.S. Mortgage-Backed Securities (MBS) Index; CMBS = ICE U.S. Fixed Rate Non-Agency CMBS Index; Sub. ABS = ICE BofA AA-BBB U.S. Asset Backed Securities Index; Emerging Markets (EM) = JP Morgan EMBI Global Diversified Index. Past performance is no guarantee of future results, which will vary. It is not possible to invest directly in an index.
3 Opportunistic When Market Conditions Change - Source: MacKay Municipal Managers and Bloomberg, as of March 31, 2025. Chart shows change in HY allocation with change in HY Muni Spread. % HY Allocation – Percentage allocation of a portfolio towards high-yield bonds. HY Muni Spread – Difference in yield between high-yield municipal bonds and comparable US Treasury securities. It is a measure of the credit risk premium for investing in high-yield municipal bonds.
4 The Time is Right for Municipal Bonds – Source: Bloomberg as of 3/31/2025. Yield is represented by yield to worst of Bloomberg Municipal Bond Index. Past performance is not indicative of future results. It is not possible to invest directly in an index. Yield to Worst (YTW) is the lowest yield a bond investor can earn if the bond is called or redeemed early, assuming no default.
All investments are subject to market risk, including the potential loss of principal. Past performance is not indicative of future results. Investment returns and principal value will fluctuate, and investors may experience gains or losses upon redemption.
The Sharpe Ratio is a measure of risk-adjusted return, calculated by dividing the excess return of an investment over the risk-free rate by its standard deviation. It is used to understand the return of an investment compared to its risk. A higher Sharpe Ratio indicates better risk-adjusted performance.
This material is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The information provided does not consider the specific objectives or circumstances of any particular investor. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with their financial professionals.
About Risk - Growth stocks can face significant price declines if earnings fall short of investor expectations, even if they grow. Early-stage growth companies face higher risks. The main risk of value stock is that a security's price may not reach its expected value. Small and mid-cap securities carry higher risks, including sharp price fluctuations, limited liquidity, and unpredictable changes, especially over the short term. Investing in foreign securities carries risks, such as currency fluctuations, unstable markets, limited information, and political or economic challenges. Emerging markets often face higher risks than developed ones.
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All investments are subject to market risk, including the potential loss of principal. Past performance is not indicative of future results. Investment returns and principal value will fluctuate, and investors may experience gains or losses upon redemption.
Fixed income securities are subject to interest rate risk; when interest rates rise, bond prices generally fall. They are also subject to credit risk, where the issuer may fail to make timely payments of interest or principal. High-yield (non-investment-grade) securities carry a greater risk of default and price volatility compared to higher-rated securities. Short-duration strategies may help mitigate interest rate risk but can still be affected by changes in interest rates and market conditions.
Active management strategies typically have higher fees than passive management.
Tax-equivalent yields are used to compare taxable and tax-exempt investments. They are based on federal income tax rates and do not account for state or local taxes. Actual after-tax returns will vary based on an investor's tax situation. Investors should consult with their tax advisors to understand the implications of their investments.
The Sharpe Ratio is a measure of risk-adjusted return, calculated by dividing the excess return of an investment over the risk-free rate by its standard deviation. It is used to understand the return of an investment compared to its risk. A higher Sharpe Ratio indicates better risk-adjusted performance.
This material is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The information provided does not consider the specific objectives or circumstances of any particular investor. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with their financial professionals.
The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. The Bloomberg U.S. Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD denominated securities publicly issued by U.S. and non-U.S. industrial, utility and financial issuers. The Bloomberg U.S. Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below. Bonds from issuers with an emerging markets country of risk, based on Bloomberg EM country definition, are excluded.The Bloomberg U.S. Mortgage Backed Securities (MBS) Index tracks fixed-rate agency mortgage backed pass-through securities guaranteed by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). The index is constructed by grouping individual TBA-deliverable MBS pools into aggregates or generics based on program, coupon and vintage. The Bloomberg Non-Agency Investment Grade CMBS index tracks the market for non-agency commercial mortgage-backed securities in the United States. The index includes non-agency CMBS conduit and fusion deals with a minimum size of $300 million. The ICE BOfA AA-BBB U.S. Fixed Rate Asset Backed Index tracks the performance of U.S. dollar denominated investment grade fixed rate asset backed securities publicly issued in the U.S. domestic market rated AA1 through BBB3, inclusive. The J.P. Morgan EMBI Global Diversified Index tracks USD-denominated bonds issued by sovereign and quasi-sovereign entities from emerging market countries. The index caps individual country weights at maximum exposure limits of 10% and redistributes the excess weight to smaller countries to avoid concentration risk. The ICE U.S. Fixed Rate Non-Agency CMBS Index tracks the performance of U.S. dollar denominated investment grade fixed rate non-Agency commercial mortgage backed securities publicly issued in the U.S. domestic mark