Rise Above Rates

Rising Rates and Global Bonds

While the Fed has embarked on a tightening cycle, other central banks are on a different path - with many pursuing accommodative policies and low to negative rates.

Global fixed income product manager Olivia Albrecht discusses policy environments and fixed opportunities outside the U.S.


Investors concerned about the impact of rising U.S. rates may want to consider non-U.S. developed market bonds.

  • The next Fed hiking cycle will be a headwind but not necessarily a severe bond market for U.S. fixed income investors.
  • Many traditional strategies for mitigating the effects of rising rates simply substitute one risk (interest-rate risk) for another risk (credit risk).
  • A simpler solution may be to consider bonds issued in developed nations currently offering more accommodative environments for bondholders.

More from PIMCO on Rates

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Rising Rates and Bonds

A short video offering basic education on what the fed funds rate is and how changes in the rate may impact bond investments.

PIMCO’s Outlook for Rates

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Rising Rates: Dispelling the Myth

A reasoned analysis that takes into account historical interest rates, the likely path of rates going forward and the impact of past interest rate rises on returns suggests that rising rates may not be such a threat to bond investors.

The Benefits of Active Management When Rates Are Rising

After nearly seven years of a near zero federal funds rate, investors are concerned about an eventual Fed rate hike and investing in the current environment. We discussed rising rates and the benefits of active management with PIMCO managing director Jim Moore.

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Disclosures

A word about risk: All investments are subject to risk and may lose value

Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.

Forecasts, estimates and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Forecasts and estimates have certain inherent limitations, and unlike an actual performance record, do not reflect actual trading, liquidity constraints, fees, and/or other costs. In addition, references to future results should not be construed as an estimate or promise of results that a client portfolio may achieve.

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