PGIM Fixed Income 1Q 2021 Outlook
PGIM Fixed Income shares their views on the current economic environment and outlook for fixed income markets.
Prepare for extended low rates
Fixed income investing in a lower-for-longer world
CAPITALIZE ON THE GOLDEN AGE OF CREDIT
Credit is in a boom cycle. Companies have ready-access to the credit markets and many issuers are using the proceeds to prioritize bondholders over equity holders. Despite tightening spreads, valuations remain compelling. Explore three reasons to take a closer look at the bond market.
- Subdued market outlook may spell opportunity
- The force is with bondholders
- Valuations remain attractive across select sectors and issuers
Did You Know?
The additional flexibility of Core Plus strategies has provided stronger historical returns on an absolute and risk-adjusted basis over the past 10- and 15-year periods.
EXPLORE THE CORE PLUS OPPORTUNITY SET
High-quality, intermediate-term Core and Core Plus bond strategies both provide income and serve as ballast to a portfolio’s equity exposure. However, between the two styles Core Plus has historically offered:
- Broader diversification across sectors and securities
- Stronger long-term returns on both an absolute and risk-adjusted basis
- Consistent outperformance relative to Core strategies
A Heritage of Managing Risk
Consistent, strong, risk-adjusted returns do not happen by accident. They often come from applying a consistent philosophy over a period of years. PGIM Fixed Income’s investment approach and strong focus on risk management can be traced back to 1875, when it started managing the assets in Prudential’s general account.
PGIM Fixed Income is an active global fixed income manager bringing scale, stability, and broad capabilities to the pursuit of consistently strong, risk-adjusted returns.
"The team…is backed by a fixed-income research powerhouse that includes a cadre of more than 100 portfolio managers and 100 analysts. The group also draws on a 50-plus-member team focused on proprietary analytics, risk management, and performance attribution." – Morningstar, Inc., 7/16/2020
A Distinctive Investment Process
PGIM Fixed Income’s investment process gives equal weight to credit research, portfolio management, and risk management to help deliver competitive returns and manage volatility. This unique structure helps to ensure proper checks and balances among the three key pillars of the investment process:
Resources to Help Grow Your Business
At PGIM Investments, we are committed to helping you grow your business. We have a variety of resources to ensure that you are having meaningful conversations with your clients ranging from asset manager outlooks and commentary to product implementation concepts and business-building ideas.
PGIM Fixed Income: Weekly View from the Desk
Eying a Shifting Yield Curve and Fed Expectations
PGIM Fixed Income Podcast Series, All the Credit: Episode 11
Episode 11 features Susan Courtney, Head of the Municipal Bond Team, and Garrett Falzone, Head of Municipal Bond Research.
1 Source: PGIM Fixed Income. Data as of 6/30/2020.
Investing involves risk. Some investments are riskier than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost.
PGIM Total Return Bond Fund—The Fund may invest in high yield (“junk”) bonds (up to 30%), which are subject to greater credit and market risks; foreign securities (up to 30%), which are subject to currency fluctuation and political uncertainty; mortgage-related securities, which are subject to prepayment risks; short sales, which involve costs and the risk of potentially unlimited losses; leveraging techniques, which may magnify losses; and derivative securities, which may carry market, credit, and liquidity risks. The Fund may not be invested in all sectors at a given time. U.S. government and agency securities are subject to market risk, interest rate risk, and credit risk. Not all U.S. government securities are insured or guaranteed by the full faith and credit of the U.S. government.
PGIM Short-Term Corporate Bond Fund—The Fund may invest in high yield (“junk”) bonds, which are subject to greater credit and market risks; mortgage-related securities, which are subject to prepayment risks; short sales, which involve costs and the risks of potentially unlimited losses; leveraging techniques, which may magnify losses; and derivative securities, which may carry market, credit, and liquidity risks.
PGIM High Yield Fund—The Fund may invest in high yield (“junk”) bonds, which are subject to greater credit and market risks; short sales, which involve costs and the risk of potentially unlimited losses; leveraging techniques, which may magnify losses; and derivative securities, which may carry market, credit, and liquidity risks.
PGIM Global Total Return Fund—The Fund may invest in foreign securities, which are subject to currency fluctuation and political uncertainty; high yield (“junk”) bonds (up to 35%), which are subject to greater credit and market risks; asset-backed securities (up to 35%), which are subject to greater credit risk; mortgage-related securities, which are subject to prepayment risks; short sales, which involve costs and the risk of potentially unlimited losses; leveraging techniques, which may magnify losses; derivative securities, which may carry market, credit, and liquidity risks; and certain economic sectors, thereby increasing its vulnerability to a single economic, political, or regulatory development.
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1041620-00002-00 Ed. 2/2021