Fixed income

Two tailwinds for fixed income

August 23, 2024 - 8 min read

Portfolio Manager and Head of Fixed Income – Harris | Oakmark

As we move into the back half of 2024, Adam Abbas, Head of Fixed Income and Portfolio Manager at Harris | Oakmark, cautions investors about abandoning bonds during times of uncertainty. In fact, two issues that have investors uneasy may actually be tailwinds, he explains in this video.

High interest rate volatility can be a good opportunity for future returns.
When rate volatility is high, it creates a value opportunity in corporate and government bonds, as historical returns show.
Supply forecast does not necessarily imply higher future yields and lower expected returns.
There is a myth that a higher supply of bonds due to government deficits will lead to higher yields and lower returns; however, there are other factors that affect the market, such as nominal GDP, corporate fundamentals, and demand.

Investment ideas

Oakmark Bond Fund OAKCX

The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the portfolio managers and Harris Associates L.P., as of July 23, 2024, and are subject to change and may change, based on market and other conditions, and without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.

There can be no assurance that developments will transpire as forecasted. Actual results may vary.

Investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments.

Bond values fluctuate in price, so the value of your investment can go down depending on market conditions.

Natixis Distribution, LLC (Member FINRA | SIPC), a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers, is a marketing agent for the Oakmark Funds.

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