Market Focus: Rising Rates – Five Ideas for Your Portfolio

The Federal Reserve raised interest rates in December and March, and several voting members have indicated that at least two more rate hikes are likely to come in 2017 and three more in 2018. In isolation, the emergence of a tightening wouldn’t be particularly troubling for investors. After all, it’s part of the normal economic cycle of expansion, contraction and expansion again.

But the current round of rate hikes follows a period of extended monetary easing tied to the financial crisis of 2008. Interest rates on many investment grade bonds are extraordinarily low. Moreover, it’s been over 10 years since the last sustained tightening cycle, and many investors may simply not know how to respond to what is a major shift in the backdrop for the markets. At this time, a key question becomes: how to build or adjust portfolios that seek to mitigate risk and generate returns in a rising rate environment.  Click here to read more…

Written by Neuberger Berman on Harvest Exchange.