white papers

Mid Cap Stocks: An Opportune Time to Allocate to this Overlooked Asset Class?

Coming out of a downturn, mid caps have historically outperformed large and small caps. In this article, we review the characteristics, attributes, and performance track record of this overlooked asset class.

Read More

The Case for Covered Calls: Premium Income & Hedged Equity

Covered call writing is a time-tested approach that can add income, dampen volatility, and diversify both equity and fixed income core strategies. Download our Guide to Covered Call Strategies to learn how covered calls work, their benefits and risks, how they perform in varying markets, and more.

Read More

Why Bonds Now?

Traditionally, fixed income has played three important roles in asset allocation: principal preservation, steady income, and risk reduction. However, pandemic-induced monetary and fiscal stimulus decreased the appeal of bonds due to low yields and interest rate risks. Today, these key attributes of bonds have returned, and investors can expect their fixed income allocation to fulfill its traditional role in a portfolio.

Read More

Bonds Are Back: Where to Find Value Ahead of Potential Rate Cuts

The fixed income teams at Madison Investments recently published several white papers that discuss how math in the bond markets has dramatically improved for investors. They also highlighted how the intermediate (1-10 year range) part of the yield curve could be the “sweet spot” amid potential interest rate cuts. In this article, we revisit these arguments and introduce additional insights for our readers.

Read More

Why Accept More Risk for Comparable Yield?

As interest rates attract investors back to fixed income, investors must consider the risk and return tradeoff in their allocation and ensure they are adequately paid for risks, particularly duration. Many assume that longer-duration strategies will offer greater yield and total return potential than intermediate-term strategies. However, analysis of current valuations and historical performance patterns tells a different story.

Read More

Correlation: The Importance of Quality in Fixed Income Allocations

In portfolio construction, understanding how each investment or asset class complements one another can be your most valuable ally. Correlation can be analyzed between asset classes but also between segments of the same asset class. Within fixed income, for instance, credit quality will often dictate the relationship between a bond portfolio and the equity market.

Read More

Cash and Money Market Funds vs. Bonds: Which is Better?

In an environment where short-term yields are the same or higher than long-term yields, many investors are replacing traditional bond investments with cash. While both financial instruments are perceived to be “safe,” investors should consider two important factors when determining which is best for their portfolio: total return potential and reinvestment risk.

Read More

Yield Curve Scenario Analysis: Using Duration and Bond Math to Measure Return Potential

The recent challenges faced by bond investors stem from a prolonged period of low interest rates, followed by a significant shift in Federal Reserve policy. The largest repricing of fixed income assets in generations resulted in deep negative returns. Now, with the 10-year Treasury yield nearing 5% and the Fed suggesting that rates may be reaching their peak for this cycle, investors are curious about future bond market returns. To demonstrate the total return potential in fixed income, we analyze interest rate sensitivity.

Read More
“Madison” and/or “Madison Investments” is the unifying tradename of Madison Investment Holdings, Inc., Madison Asset Management, LLC (“MAM”), and Madison Investment Advisors, LLC (“MIA”). MAM and MIA are registered as investment advisers with the U.S. Securities and Exchange Commission. Madison Funds are distributed by MFD Distributor, LLC. MFD Distributor, LLC is registered with the U.S. Securities and Exchange Commission as a broker-dealer and is a member firm of the Financial Industry Regulatory Authority. The home office for each firm listed above is 550 Science Drive, Madison, WI 53711. Madison’s toll-free number is 800-767-0300.

Any performance data shown represents past performance. Past performance is no guarantee of future results.

Non-deposit investment products are not federally insured, involve investment risk, may lose value and are not obligations of, or guaranteed by, any financial institution. Investment returns and principal value will fluctuate.

This website is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.