Fixed Income | Market Currents

Podcast: Play in new window | Download | Embed

The first quarter of 2022 saw negative returns across the U.S. bond market as persistently rising inflation surprised central bankers and bond investors alike. Dramatically rising interest rates have focused bondholders’ attention on fixed-income investments – even provoking some to abandon the asset class entirely.

In this episode of Market Currents, Northern Trust’s Katie Nixon welcomes Peter Mladina, director of portfolio research for Wealth Management, to explore the purpose of fixed-income securities in volatile and uncertain conditions, which seem likely to shape the investing landscape for the foreseeable future.

Mladina discusses:

The unique role of safer, risk-control assets in a portfolio and the foundational function they hold alongside return-seeking risk assets.
How investors can structure a portfolio to secure high-priority goals by matching the maturity of risk-control assets with expected liquidity needs.
Northern Trust’s Portfolio Reserve and how it is customized to secure a specified number of years of lifestyle spending.
Interest-rate risk and its headline role among the types of risk that fixed-income investors are exposed to, and a the way risk-control assets hedges them all through periods of volatility and unpredictability.

Peter Mladina is responsible for applying research, tools and methods that support asset allocation, portfolio construction, investment selection and best practices in portfolio management to the wealth management investment process.

Peter is an Adjunct Professor of Economics at UCLA, where he teaches applied finance for the Master of Applied Economics program. His research on asset allocation and portfolio construction has been published in peer-reviewed journals and he is a co-author of the CFA Institute’s revised Level III asset allocation curriculum. He received a Bachelor of Arts degree in Economics from UCLA and Master of Business Administration degree from Edinburgh Business School.

Podcast: Play in new window | Download | Embed

As economic reopening continues and supply-demand imbalances lead to price increases, investors are understandably fixated on the future path of interest rates — a key driver of future growth and returns. But in this particularly unusual period of economic history, what will the Fed do?

Many believe higher inflation is transitory and that the Fed should wait it out. Others argue that it should take action now to get ahead of a potential problem in the future.

In this episode, Colin Robertson, Northern Trust Asset Management’s head of fixed income, weighs in on this debate. To do so, he provides historical context, interprets Fedspeak and illuminates the economic and policy dynamics that will drive interest rates going forward.

Colin discusses:

The drivers of low interest rates since the financial crisis
Noise versus signal related to predicting future monetary policy
The current and most likely future shape of the yield curve
Northern Trust’s outlook for total bond returns
The merits of owning bond funds versus individual bonds
And more

About Our Guest:

Colin Robertson is an executive vice president and head of fixed income for Northern Trust Asset Management. This role includes overseeing fixed income investments for individual and institutional investment management accounts at Northern Trust, Northern Funds and Northern Institutional Funds. Through his leadership managing interest-rate-sensitive and credit-sensitive fixed income portfolios, Northern Trust has built a world-class fixed income team, investment process and products.

Market Currents

a Northern Trust Podcasts

Tag Archives: Fixed Income

As Rates Rise, do Bonds Belong in Real-World Portfolios?

Interest Rates: Grounded or Ready for Take Off?