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THE INCOME IN FIXED INCOME IS BACK

APA
Mar 24, 2022
2 min read

Updated: Mar 21, 2025

Just a few headlines from the ever-growing list this week:

Global Bond Index Loses $2.6 Trillion in Record Slide from Peak
Treasuries are headed for their worst quarter ever-down more than even 1980 when Paul Volcker carried out a record 5-point hike.
Bond Yields Skyrocket on Mounting Bets for Hikes
Municipal Bond Market Sees Worst Day since Early 2020 Selloff
Municipal bonds are having their worst quarter since the 1990s
Bond Markets Fright Feels Like 2007 All Over Again

Furthermore, there are 200 basis points of rate hikes now priced in for this year, which would be the biggest 12-month tightening of monetary conditions since the 250 basis-point upward move in 1994.

On a positive note – aside from a brief period in Spring 2020, we have not been able to offer our High Quality Intermediate Tax-Exempt Strategy at near 2.00% since Spring of 2019...we can now. We have not been able to offer a near 3.00% Enhanced Intermediate Strategy since Spring 2019…we can now. And we have not been able to offer any income on our Ultra-Short, after fees, that beats money funds…we can now.

“For SMA investors, we view this as a healthy move, which has brought yield back into our market, and allowed us to reposition and execute beneficial tax-loss swaps – harvesting losses and increasing portfolio book yield.”

Below are updated target characteristics for select APA strategies and comparisons to the end of the year. This highlights the quick and sharp move higher in rates that has played out over the first quarter. For SMA investors, we view this as a healthy move, which has brought yield back into our market, and allowed us to reposition and execute beneficial tax-loss swaps-harvesting losses and increasing portfolio book yield.

Disclosure

APA-2203-29