Higher-Duration Assets Tend to Outperform After Tail End of Rate Hike Cycles
With the Fed’s tightening cycle likely ending soon, now may be a good time for investors to extend duration in their portfolios.
Bond Returns Around End of Rate Hike Cycles
Source: Morningstar and Bloomberg. Average annualized returns 1 year and 3 years before or after last Fed rate hike of the last four cycles (1994-2021). 0 represents month of last rate hike. Data for Morningstar Intermediate Core-Plus Bond Category average. Past performance does not guarantee future results.
With the Fed’s tightening cycle likely ending soon, now may be a good time for investors to extend duration in their portfolios.
It may be a good time for long-term investors to consider adding REIT exposure to their portfolios.
With the Fed nearing the end of its current hiking cycle, investors may benefit from extending duration in their bond portfolios as rate cuts may soon follow.
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