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Mid-Year Check-In
The Fragmentation Era
With the world order in flux, investors can look to fortify portfolios by diversifying across global markets and capitalizing on attractive, high-quality yields.
Dan Ivascyn, PIMCO’s Group CIO, provides a rundown of what’s changed—and what hasn’t—over the tumultuous first half of the year, and shares his insights on where the economy, markets, and investment opportunities may be headed next.
More to Know
The Federal Reserve cited increasing risks to the U.S. labor market as a reason to ease monetary policy.
Mortgage bond reinvestment could be the Federal Reserve’s most effective and immediate tool to unlock the housing market – without even touching interest rates.
Investors should approach private investment grade (IG) credit with a focus on risk-adjusted returns versus liquid IG, while seeking to maintain a core IG trait: limited impairment risk.
In Jackson Hole, Chair Powell Hints at Near-Term Rate Cuts and Reiterates Long-Term Approach
The Federal Reserve notes the balance of risks to the U.S. economy may warrant a shift in policy stance – in other words, a rate cut.
We focus on high quality investments with compelling yields in an environment of elevated uncertainty.
The degree to which growth in Europe slows, along with inflation developments, will be key in determining the path ahead for the European Central Bank.
The Federal Reserve offered little guidance on the outlook at its July meeting, striking a somewhat hawkish tone.
Holding Steady Amid Whipsawing Markets
The outlook for the second half of 2025 remains favorable for strategies emphasizing global diversification and risk mitigation.
Greg Sharenow, managing director and portfolio manager, charts the continued resilience of commodities and their low correlation with stocks and bonds amid recent geopolitical shocks, underscoring their strength as portfolio diversifiers.
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Disclosures
All investments contain risk and may lose value. Investors should consult their investment professional prior to making an investment decision. Past performance is not a guarantee of future results.
Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed.
Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. Different types of investments involve varying degrees of risk. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. No representation is being made that any account, product, or strategy will or is likely to achieve profits, losses, or results similar to those shown.
Bloomberg U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis.
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