When interest rates drop, existing bonds become more valuable because they pay a higher rate than new bonds. Recently, the expectation of rate cuts boosted the performance of the Bloomberg U.S. Aggregate Bond Index (AGG), benefiting many bond portfolios.
Given this movement in bonds that has already occurred, the best gains from Fed rate cuts may already have occurred. At Redwood, we focus on diversifying asset class exposure to ensure consistent returns, even when bond markets are uncertain.
Easy Money Already Gone?
- We believe the preservation of capital is key to consistent, long-term investment success.
- Our investment approach is grounded in economic theory and backed by quantitative analysis.
- Managing drawdown risk is a pillar from which we build our portfolios.
60-Second Breakdown: September 23, 2024
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
