Growth and Transition Strategy Update
9%
8%
7%
6%
5%
4%
3%
Yield (%)
and as opposed to the past 10 years, returns come with dispersion and volatility making
active management of these yields a valuable part of a total Fixed Income allocation...
The range of yields available across major Fixed Income asset classes has more than doubled in the last 18 months alone¹
Fixed Income Yields: May 2023
2%
1%
0%
Japan Agg
European Agg
Global Agg
US Treasury
US Agency
US Aggregate
US MBS
US Securitized
AAA CMBS
US Credit
1-3Y IG
US CMBS Aggregate
US Long Corp
US Corp BBB
US Corp BB
Global Emerging...
US HY
Yield (%)
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Fixed Income Yields: Dec 2021
Japan Agg
European Agg
1-3Y IG
US Agency
US Treasury
Global Agg
US Aggregate
AAA CMBS
US CMBS Aggregate
900
800
797
700
Constituents
600
The HY Index, with 2011 members, is an incredible illustration of how an index
average cannot fully describe the dispersion (and opportunity) within¹
HY Index Constituents by Spread Bucket
Half the index trades below 300 or above 800...
...while the index trades at 460bps (along with 5%
of the constituents)
25%
20%
500
400
Return (%)
15%
10%
5%
0%
300
270
219
-5%
200
171
128
-10%
97
84
100
73
69
42
36
25
-15%
0
2015
(300, 350]
(400, 450]
(500, 550]
(600, 650]
(700, 750]
> 800
≤ 300
(350, 400]
(450, 500]
(550, 600]
(650, 700]
(750, 800]
bps
BlackRock
US Securitized
US MBS
US Credit
US Corp BBB
US Long Corp
US Corp BB
Global Emerging...
US HY
Across 10 major global Fixed Income asset classes, owning the best returning asset and selling
the worst has created increasingly large alpha - in 2019, there was virtually no differentiation!¹
30%
2016
2017
Note: For footnoted information, refer to slide 87. Index definitions are found on slide 88. Index returns are shown for illustrative purposes only. It is not possible to invest directly in an index. Forecasts are based on estimates and assumptions. There
is no guarantee that they will be achieved. Past performance is not indicative of future results.
2018
Return: Long Best less Short Worst Asset
2019
2020
2021
2022
■US Agg Return
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