white papers
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 MoreWhy 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 MoreCorrelation: 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 MoreCash 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 MoreLiquidity Risk
Imagine a crowded room with just one exit. If everyone suddenly had to leave, those close to the exit would be fine, but it would be chaotic for others. This is similar to bond liquidity, which is like the available exits. When bonds are highly liquid, investors can smoothly come and go without a hitch. But when liquidity is low, it's like many investors trying to exit through one door. This article delves into bond market liquidity and its effects.
Read MoreMunicipal Bonds
Municipal bonds make up nearly 10% of the investment grade bond market. The $4 trillion in municipal debt is issued by government entities to cover expenses and finance projects that significantly benefit the public. This paper provides an overview of Municipal Bonds, highlighting their tax advantages, illustrating with examples, and exploring their intricacies.
Read MoreCredit Analysis
History has taught us that even highly-rated bonds can quickly experience deteriorating credit quality and wreak havoc on a portfolio. Naturally, credit quality becomes a focus in weakening market conditions, but the importance of credit research in all market conditions must be considered.
Read MoreBond Concepts Series
Learn the nuances of fixed income investing, including the risks, opportunities, and investment styles.
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 and is not investment advice.
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 and is not investment advice.