1. CFA Society of Rochester January 26, 2017
Panel Discussion: Fixed Income
Daniel Loughran, CFA

2. I. Background and Investing Philosophy
II. Current Bond Markets – Observations and Ideas
III. Long Term Bond Investing – Perspectives

3. Source: Trading Economics; ieconomics, Inc.

4. Source: Multpl

5. Source: Bloomberg

6. Perspectives of a Former Bond Fund Manager
Over time, the yield component of fixed income dominates price change
--see Leibowitz, Bova, and Kogelman 2014
Challenge credit rating agencies for opportunities; they sometimes misunderstand and often lag
--NYC IDA (US Airways) 9.125% 12/1/15
--Ireland and Portugal Sovereign Debt during crisis
Time Horizon Matters
--retail mutual fund investors sometimes mismatch product with time horizon,
leading to “buy high, sell low” outcomes
Fixed Income is not only a low return, diversifying “ballast” for portfolios
--embrace risk and opportunity in all sectors of the asset class

7. Additional reading:
Long-Term Bond Returns under Duration Targeting
Financial Analysts Journal Volume 70 Number
Martin L. Leibowitz, Anthony Bova, CFA, and Stanley Kogleman
Bond Ladders and Rolling Yield Convergence
Financial Analysts Journal Volume 71 Number
My Top 10 Peeves
Clifford S. Asness
(particular interest in “#10: Bonds have prices too”)