Winter Is Coming: How to Invest in Late-Cycle Credit

Anyone who has read or watched “Game of Thrones” over the years is familiar with the phrase, “Winter Is Coming.” In the books and on the show, long cycles of warm weather are followed by lengthy winters that can last many years. No one can predict when those winters will arrive, or how long they will last.

That metaphor is particularly fitting for economic and credit cycles. Every cycle of growth resolves with a contraction eventually, but it is very difficult to time precisely when credit or equity markets might turn, or how long it might take either market to recover.

Winter Is Coming: How to Invest in Late-Cycle Credit

Anyone who has read or watched “Game of Thrones” over the years is familiar with the phrase, “Winter Is Coming.” In the books and on the show, long cycles of warm weather are followed by lengthy winters that can last many years. No one can predict when those winters will arrive, or how long they will last.

That metaphor is particularly fitting for economic and credit cycles. Every cycle of growth resolves with a contraction eventually, but it is very difficult to time precisely when credit or equity markets might turn, or how long it might take either market to recover.

Late-Cycle Investing: MBS Offer Attractive Income and Downside Protection

With the daily stream of “7th inning” and “fourth quarter” articles about the current economic cycle, it is hard to avoid warnings in the media about the potential for a downturn and/or recession. There are some warning signs, to be sure, such as an inverted yield curve, tight labor markets, and a slowing housing market, but there are also other factors—such as modest household leverage, low corporate default rates and accommodating monetary policy—that suggest the economy may still have some room to run.

Late-Cycle Investing: MBS Offer Attractive Income and Downside Protection

With the daily stream of “7th inning” and “fourth quarter” articles about the current economic cycle, it is hard to avoid warnings in the media about the potential for a downturn and/or recession. There are some warning signs, to be sure, such as an inverted yield curve, tight labor markets, and a slowing housing market, but there are also other factors—such as modest household leverage, low corporate default rates and accommodating monetary policy—that suggest the economy may still have some room to run.

Staying Cool When Bond-Market Stress Heats Up

“When is the credit cycle going to turn?” It feels like we have been hearing—and asking—that same question for several years now. And in an era marked by uncertainty, we are at an especially uncertain crossroads right now in the bond market. The Fed’s path forward over the next couple of years is fairly murky. Economic indicators are mixed--unemployment and inflation numbers generally remain healthy, while other signs (dwindling home and auto purchases, falling capex, declining manufacturing output) point to slowing growth. U.S.

Staying Cool When Bond-Market Stress Heats Up

“When is the credit cycle going to turn?” It feels like we have been hearing—and asking—that same question for several years now. And in an era marked by uncertainty, we are at an especially uncertain crossroads right now in the bond market. The Fed’s path forward over the next couple of years is fairly murky. Economic indicators are mixed--unemployment and inflation numbers generally remain healthy, while other signs (dwindling home and auto purchases, falling capex, declining manufacturing output) point to slowing growth. U.S.

Muni Bonds: Winners in 2018 and Bright Skies Ahead for 2019

Municipal bonds held their ground in 2018, and truly shined when equity markets were punished during the fourth quarter. For the year, munis outperformed not only equities, but other major fixed income sectors as well. We are optimistic about opportunities in the muni market in 2019. Rising uncertainty for risk assets, coupled with a favorable mix of healthy demand and limited supply, offer a promising backdrop.

Muni Bonds: Winners in 2018 and Bright Skies Ahead for 2019

Municipal bonds held their ground in 2018, and truly shined when equity markets were punished during the fourth quarter. For the year, munis outperformed not only equities, but other major fixed income sectors as well. We are optimistic about opportunities in the muni market in 2019. Rising uncertainty for risk assets, coupled with a favorable mix of healthy demand and limited supply, offer a promising backdrop.

2018 Impact Report: Sustainable Core Fixed Income Strategy

A Letter of Introduction From The Portfolio Managers

 

Brown Advisory is deeply committed to sustainable investing. As of Sept. 30, 2018, our firm managed approximately $4.1 billion* in client assets under various sustainable investment mandates for individuals, families and institutions.

Our goal with this work is to help our clients generate attractive investment returns driven by innovative ESG research, align their investments with their values and make a positive impact on society with their capital.

2018 Impact Report: Sustainable Core Fixed Income Strategy

A Letter of Introduction From The Portfolio Managers

 

Brown Advisory is deeply committed to sustainable investing. As of Sept. 30, 2018, our firm managed approximately $4.1 billion* in client assets under various sustainable investment mandates for individuals, families and institutions.

Our goal with this work is to help our clients generate attractive investment returns driven by innovative ESG research, align their investments with their values and make a positive impact on society with their capital.

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