With the close of the Federal Open Market Committee meetings this week, the market’s expectations were confirmed as the Fed chose to increase interest rates by the anticipated 25 basis points. In addition, they set the stage for two to three additional rate hikes later this year. This is both consistent with expectations and in alignment with our thematic view of fixed income headwinds.
This research report from our colleagues at Asset Consulting Group provides some data to that effect. The current bond environment is not without challenges. We have navigated this through thoughtful portfolio construction, and will continue to do so, specifically by allocating to flexible mandate and absolute return mutual funds. This design allows for the nimble adjustment of your fixed income portfolio by your managers, who know that our number one objective for your fixed income investments is preservation of capital.