Insight
De-Risking? Mind the Carbon!
Shifting a portfolio from stocks to bonds reduces investment risk, but it can also increase the portfolio’s carbon footprint. Read about a carbon-aware approach to reduce that impact and benefit the portfolio overall.
Key takeaways
- Bond investors can start positioning for the eventual normalization of the yield curve by extending duration and anticipating a steepening curve.
- Income remains the primary driver of returns in fixed income. Maximizing income per unit of risk can help generate efficient expected returns.
- Slower expected economic growth suggests that a higher-quality bias should persist as monetary policy remains restrictive and fiscal support appears unlikely anytime soon.
- A combination of healthy fundamentals and strong technicals should support municipal bonds and provide a buffer against market volatility.