Following the bond market’s recent beating, term yields have already priced in aggressive Fed rate hikes, positioning core bonds to effectively diversify credit risk.
An effective factor investing strategy should be both contextual and adaptable as markets change over time.
Strong funded ratios and higher interest rates are prompting many corporate pension plan sponsors to shift assets to LDI strategies.
We believe that the new levels of home prices reached during the housing rally not only will be sustained, but will be a positive force pulling us through inevitable bouts of uncertainty in markets and the economy.
We see scope for continued global equity gains as the impacts from Covid, policy stimulus and inflation diminish. The current balance of market factors keeps us overweight U.S. large cap stocks.
The market’s curve flattening expectations may be excessive, as the timing of the hikes and aggressiveness of the U.S. Federal Reserve are still open to debate.
Diversification can relieve long duration corporate bonds from being the only way LDI plan sponsors meet spread or duration targets. Complementing with derivatives, IGPPs, CMLs and CMOs can help create a more efficient and effective portfolio.
Covid-19 presented a real-time test of private credit’s ability to withstand stress. Voya met the challenge through its team experience and proactive response.