While many institutional investors are betting on short fixed income these days, at Fidelity, there’s a more nuanced view of the opportunities that still exist in bonds.
During a breakout session Monday in Boston at the 4th annual Retirement Income Symposium, that view was presented to a very interested room of advisors. Dan Beckman, a VP for product management at Fidelity Financial Advisor Solutions, moderated a session with two institutional money managers—Jim Jordan of Fidelity Investments and Michael Schmitt of Fidelity Management & Research Co.
First, the two managers pointed out that corporations are in very good shape from a bondholder’s perspective, and the consensus is that bond yields are more likely to rise. Treasuries are themselves up 7% to date this year, but “Europe is the wild card.”
Schmitt said that it’s a positive development that “at least they’re talking in Europe” about addressing the eurozone’s debt issue, there are three major developments to watch.