New Bond Era

This WealthTrack program from March 24th fell through the cracks while I was doing just weekly updates but given the events of the past week, it's more relevant than ever here in mid-May.  It's all about how the rising interest rate environment has reinvented the bond market and how we can still find a suitable place for bonds in our portfolios.  Enjoy, and hope everyone enjoyed this beautiful weekend.  

View this email in your browser

Watch a Preview

Sponsored by: March 24, 2022  Dear WEALTHTRACK Subscriber, The direction of inflation and interest rates are key to the performance of bond prices and they are in the midst of a massive change. The shift in direction has been most dramatic for inflation. After a decade of staying mostly below the Federal Reserve’s long term 2% target, the Consumer Price Index recently soared nearly 8% year over year. Meanwhile, until very recently interest rates have remained near historic lows. Despite telegraphing it would for months, the Federal Reserve just raised its key short-term federal funds rate for the first time since 2018. And the short-term interest rate sensitive yield on the 2-year treasury note has risen accordingly while the longer-term 10-year treasury yield has been more subdued.  It now remains to be seen how aggressively the Federal Reserve will raise interest rates to dampen economic activity and rein in inflation. Its decisions will heavily influence the performance of bonds not just in the U.S. but also in the rest of the world.  This week’s guest will update us on the prospects for the bond markets but also on the increasing influence of his specialty, sustainable bond investing, on performance.  He is Steve Liberatore, Lead Portfolio Manager and Head of ESG / Impact - Global Fixed Income at Nuveen, the investment manager arm of TIAA-CREF and a pioneer in the field. Liberatore oversees more than $18 billion in public fixed income ESG and impact strategies and investments including the flagship $7 billion dollar TIAA-CREF Core Impact Bond Fund rated 4-star bronze by Morningstar.  Under his leadership since its 2012 inception the fund has beaten both the entire Intermediate Core Bond Funds category and index.  In this week’s EXTRA feature Liberatore discusses some of the fastest growing segments of fixed-income impact investing including social bonds which fund programs for low income women in the developing world.  If you miss the show on public television, you can watch it on our website over the weekend. You can also find the WEALTHTRACK podcast on Stitcher and SoundCloud as well as iTunes and Spotify. Have a lovely weekend, and make the week ahead a healthy, profitable and productive one!   Best regards, Consuelo