Fiera Capital Taxable Fixed Income 2nd Quarter Commentary

This commentary reviews the previous quarter and discusses our outlook and investment approach for the coming months.

Commentary Highlights

• As the year progressed, interest rates were driven to historic lows by the buying patterns of price-insensitive central bankers and rising fear in the markets, particularly with the Brexit vote. We held the view that this was a panic and not a crisis, and maintained our overweight to corporate bonds throughout the quarter.  

• Our outlook on financials has shifted from positive to stable as a result of the pressure net interest income will likely face, as well as the challenge of increasing new issuance. During the quarter we began to rotate into high-quality utility securities as a way to capture exposure to more defensive, domestically-focused companies.

• As we anticipate the pull of negative rates overseas and continuous central bank interventions to keep a lid on any rise in US rates in the near future, we will remain fully invested in our portfolios.

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