2017 Fixed Income Market Outlook
AR1152272
Newfleet Asset Management | 1
continued
The surprise victory of Donald Trump in the 2016 U.S.
Presidential election is an appropriate starting point for laying
out our 2017 Outlook. To a large degree, it is too early to tell
what the market impact of a Trump presidency ultimately will
be. Details of the President-elect’s economic plan have been
sparse, but early indications are for growth-oriented policies
that involve tax cuts, infrastructure spending, and a tax holiday
for repatriation of cash held abroad. Trump’s protectionist
stance on trade is a potential offset to growth. Regardless of
his policies, we believe that the uncertainty created by the
Trump Presidency will drive market volatility higher. As we
have consistently demonstrated over time, we will seek to take
advantage of that volatility.
Post-election Treasury yields have surged dramatically as a result
of increased expectations for higher growth and higher inflation
under the new political regime. Potential policies that promote
a turn away from globalization will be important to monitor, as
the evolution of global trade has broad implications for inflation,
commodity prices, growth, and trends in credit quality.
u
Prior to the election, we began to rotate our multi-sector
portfolios from high yield to bank loans based on relative value
and increased expectations for rising rates; however post-
election, the relative value between loans and high yield has
narrowed. In general, our overweight to credit sectors should
perform well in a growth-driven, rising-rate environment given
the excess yield over Treasuries and expectations of further
spread tightening.
u
We continue to maintain our up-in-quality bias in leveraged
finance based on current valuations, and seek to take
advantage of market dislocations as increased volatility
should create greater opportunities for alpha generation.
u
We continue to be favorable on valuations in non-agency
residential mortgage-backed securities (RMBS) and out-of-
index asset-backed securities (ABS). These securities tend to
be less sensitive to rates given lack of extension risk in RMBS
and the short duration nature and excess spread of ABS.
We continue to believe that the Fed’s rate increases will be
gradual and transparent and that the central bank will remain
cautious and data dependent throughout 2017. Increased
infrastructure spending, regulatory relief in certain industries,
and potential tax cuts have all contributed to expectations for
higher inflation, as evidenced by the 24 basis point spike (as of
12/14/16) in the 10-year U.S. Treasury yield breakeven rate post-
election. Fiscal spending should translate into higher growth and
increased borrowing at both the federal and municipal levels. The
potential for expansionary fiscal policy is offset by the expected
contractionary impact of Trump’s proposed trade restrictions on
global GDP. As expected, the FOMC raised the Federal Funds
target rate 25 basis points at the December meeting in response
to improvements in labor market conditions and a “considerable”
increase in market-based inflation expectations. Together, the
stimulus-driven boost to growth and the risk of increased inflation
have accelerated the assumed pace of rate hikes over the next
few years though we continue to stress that these hikes will be
gradual. We believe that two or three rate hikes potentially may
happen in 2017 but it will be dependent on the markets, the
economy, and Trump’s policies. Worthy of note, Trump has been
critical of Fed Chair Janet Yellen and has taken a fairly hawkish
tone on monetary policy. Whether this posture changes now that
he is President-elect is yet to be determined.
As we look ahead to 2017, what does this mean for the fixed
income markets? We believe opportunities exist and, consistent
with our 2016 Outlook, effective credit selection is of the
utmost importance and will drive returns for 2017.
While we do not bet on or anticipate interest rate movements
as part of our investment process, we do have an opinion as
to where we see rates going over the next 12 months. We
expect that the 10-year U.S. Treasury yield will be range bound
between 2.25-3%, with rates approaching the higher end of
the range if President-elect Trump gets some of his pro-growth
policies through early and these policies help push GDP growth
to the 3-4% range. If this were to happen, we would expect
rates to eventually pull back some as higher rates start to slow
the economy. The pace of Fed rate increases and messaging will
be particularly important to spread sectors going forward. Other
factors that will influence the credit markets in 2017 include
oil prices, China and overall global growth, and the U.S. dollar.
Spread Sector Outlook
CORPORATE HIGH YIELD
Opportunity
– There are at least three reasons why corporate
high yield is appealing. First, on a relative basis, it is still
one of the highest yielding sectors of the bond market. In an
environment where negative-yielding bonds account for more
than $8 trillion globally, income-starved investors still flock to
the high yield market. Second, though fundamentals could be
categorized as more “later stage” based on prior cycles, there
have been some green shoots on this front. Both top-line and
bottom-line growth have been occurring for the first time in
well over six quarters. In addition, the default rate is forecast
to decline in 2017 to levels below historical averages, as both
2017 Fixed Income
Market Outlook
2017 FIXED INCOME MARKET OUTLOOK
Newfleet Asset Management | 2
the energy and metals & mining industries experience some
semblance of stabilization. Third, high yield typically does well
in a rising rate environment due to historically low correlations
to interest rates. High yield has the spread “buffer” to help
mitigate some of the negative effects of rising rates. Further,
there usually is a corresponding improvement in the underlying
economy that factors into the improving credit quality within
the high yield issuer universe.
Areas of concern
– To begin with, we are starting 2017 at a much
different place than a year ago. At the beginning of 2016, the
average price of the high yield index was $89.10, the yield to
worst was 8.74%, and the option-adjusted spread was +660,
largely due to concerns about global growth and the significant
negative impact of the commodity industries on the overall
market. By comparison, as of November 30, 2016, the average
price of the high yield index was $98.30, the yield to worst
was 6.57%, and the option-adjusted spread was +455. Next,
there appears to be a shift in global stimulus away from reliance
on monetary authorities to escape the slow-growth doldrums to
recognition of the need for fiscal stimulus to provide an alternative
lifeline. Finally, one cannot underestimate the impact of politics.
Major elections across the globe over the next year could have a
profound impact on markets, rates, and the general investment
climate. The broad implications of the Trump presidency and a
Republican-controlled Congress for the high yield market remain
to be seen. Early indications are negative price movements in
healthcare, but positive movements in pharma.
In general, idiosyncratic risk is still very elevated so avoiding
“losers” will be key to generating alpha in the space. Thematic
industry plays will play a vital role next year just as they have
done over the past couple of years (for example in 2016 being
overweight in energy and metals & mining and being underweight
healthcare and pharma). As we enter 2017, getting the call right
in these four industries, energy, metals & mining, healthcare,
and pharma, amongst others, could potentially deliver alpha to
a high yield allocation.
BANK LOANS
Opportunity
– From a fundamentals perspective, balance
sheets are in good shape and capital markets are open. A new
administration leaning toward fiscal spending and deregulation
may positively affect growth and extend the credit cycle.
Technical conditions are supportive for bank loans. A rising rate
environment could spur inflows into the asset class from both retail
and institutional investors on a leveraged as well as unleveraged
basis. Additionally, a loosening of regulations surrounding CLO
creation could have a large impact on loan demand.
Valuations for bank loans indicate that minimal loan price
appreciation remains, with the base case of a “coupon clip”
type of environment going forward. However, there is upside
to total return in a rising rate environment (i.e., an increase in
LIBOR against which loans are benchmarked) as well as the
aforementioned potential for two Fed rate hikes in 2017. The
impact of rising rates on duration-sensitive asset classes could
make the loan market very attractive in 2017. It is worth noting
that 1994 and 2004 through 2006 were both periods where
loan prices were near par but the asset class was a top performer
as rates were rising.
FED FUNDS EFFECTIVE RATE, 3 MONTH LIBOR AND SELECT FIXED INCOME
PERFORMANCE
As of 9/30/16. Loan Index is the Credit Suisse Leveraged Loan Index. Bond Index is the
Bloomberg Barclays U.S. Aggregate Bond Index. Treasury Index is the Bloomberg Barclays
U.S. Treasury Index. *Arithmetic cumulative returns from 2004 – 2006. Source: Barclays
Live, Credit Suisse Leveraged Loan Index, Bloomberg. The indexes are calculated on a total
return basis with net dividends (and capital gains if applicable) reinvested. The indexes are
unmanaged, their returns do not reflect any fees, expenses, or sales charges and they are
not available for direct investment.
Past performance is not indicative of future results.
Yield (%)
0
2
4
6
8
10
12
14
2016
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
Returns
1994 2004-2006*
Loan Index
10.32%
18.62%
High Yield Index
-1.03%
25.74%
Bond Index
-2.92%
11.10%
Treasury Index
-3.38%
9.41%
CS Loan Index Current Yield
3 Month LIBOR Rate
Fed Funds Effective Rate
Areas of concern
– While default expectations are below
historical long-term averages, they are predicted to trend higher.
This should not necessarily sound the alarm, but there are some
storm clouds on the horizon with existing vintage credit risk
at pre-crisis levels on nearly every metric. At this stage of the
credit cycle, coupled with valuations, our higher quality bias
remains in place.
CORPORATE INVESTMENT GRADE
Opportunity
– With corporate investment grade spreads close to
multi-year averages, the backup in yields experienced in late
2016 offers buyers a compelling entry point in early 2017.
Yields attainable in the U.S. corporate market remain three
times greater than those in comparable European and Asian
markets, a phenomenon that led to inflows throughout 2016.
This dynamic, combined with the potential for lower net supply
in 2017, leads us to conclude that the investment grade market
has room to grind tighter. This is especially true within industries
like banking and energy where fundamentals are improving.
Areas of concern
– In the aggregate, credit fundamentals across
the investment grade sector have deteriorated over the past
several years. Many companies that previously operated without
leverage have been unable to resist the allure of low interest
continued
2017 FIXED INCOME MARKET OUTLOOK
Newfleet Asset Management | 3
rates. Deterioration among the higher credit tiers within the
investment grade market has been greater than for the lower
tiers. An underweight thus is prudent in that segment of the
market as spread compensation remains low.
ASSET-BACKED SECURITIES (ABS)
Opportunity
– 2016 was a very good year for out-of-index/off
the run ABS. Given the current economic backdrop of low
unemployment, consumer confidence currently is running at
the highest level since 2007. Low interest rates have reduced
consumer debt service costs to historic lows. As evidence, the
Household Financial Obligation Ratio (see below) depicts a U.S.
consumer’s debt service propensity to be in the best shape it
has been over the last 30+ years.
With respect to returns in this space for 2017, the majority
of return will come from income as current spreads for most
ABS sub-sectors are at or near their spread tights over the last
year. Given the short duration nature of this asset class, we
believe that consumer ABS offers good relative value and solid
credit fundamentals for the risk taken. Some examples of a
2017 opportunity set within ABS are: subprime auto: 2.50% to
4.00% yields for investment grade paper; franchise royalty fee
deals: 3.50% to 4.50% yields for investment grade paper; and
timeshare receivables: 2.50% to 3.50% yields for investment
grade paper.
Areas of concern
– We are cautious on the peer-to-peer lending
space. That said, we have made investments in this sub-sector
of the ABS market but have done so deliberately and prudently.
Overall, we are still skeptical whether this space can survive a
severe downturn in consumer credit. Lastly, subprime auto loan
underwriting terms have eased a bit. Coupled with much less
spread pick-up at the bottom of the capital stack versus senior
bonds, we are cautious about investing in the most junior bond
within the capital stack at current levels.
COMMERCIAL MORTGAGE-BACKED SECURITIES
(CMBS)
Opportunity
– In last year’s Outlook, we indicated that CMBS
spreads were at multi-year wide levels for new issues and at
one-year wide levels for legacy paper (issued in 2005-2008).
Going into 2017, CMBS is at or near the 52-week tights on a
spread basis versus U.S. Treasuries. We consider Single-Asset
Single-Borrower (SASB) deals to be the most compelling play
within CMBS versus the standard issue CMBS conduit deals.
A backdrop of limited construction, lower vacancy rates across
major property types, and increases in property net operating
incomes has set the table for solid real estate fundamentals.
Commercial real estate (CRE) valuations, as evidenced by
Moody’s National All-Property Index, increased 5.0% on a year-
to-date basis through 9/30/2016.
In 2017, we will try to take advantage of seasoned conduit
deals (2011-2013 vintage with conservative underwriting)
where structural deleveraging took place and real estate property
values have appreciated since loan origination. We like the SASB
seniors and subordinate tranches where detailed underwriting
analysis is more attainable than multi-loan conduit transactions.
Areas of concern
– With rates finally rising, the concern going
forward is whether commercial real estate valuations will come
under pressure. According to CoStar data, the current cap rate
spread to U.S. Treasuries is approximately 500 basis points for
all property types. Historically, the tendency has been for cap
rates to compress when Treasury rates rise. In a moderately
rising rate environment, this should keep commercial real estate
valuations firm.
Given the appreciation that we have witnessed in commercial
real estate since 2008, we are concerned about future real
estate appreciation given where we are in the economic
cycle, coupled with the prospect of a rising rate environment.
Shaded areas indicate US recessions. Source: Board of Governors of the Federal Reserve System (US).
HOUSEHOLD FINANCIAL OBLIGATIONS AS A PERCENT OF DISPOSABLE PERSONAL INCOME
2017 FIXED INCOME MARKET OUTLOOK
Newfleet Asset Management | 4
According to Moody’s National All-Property Index, we are 21%
above the peak valuations seen in 2007. With CRE valuations
at all-time highs, we are concerned with new issue conduit
subordinate bonds. The inherent leverage in new issue conduit
deal structures can penalize an investor severely if a few of the
underlying properties do not perform.
NON-AGENCY RESIDENTIAL MORTGAGE-BACKED
SECURITIES (RMBS)
Opportunity
– RMBS continue to be an important alpha-generating
sector for Newfleet. Technical conditions are positive, as the
market still has a negative net supply. New issuance in 2017
is expected to be roughly $50 billion, slightly less than 2016.
Housing fundamentals remain solid based on a growing economy,
lower mortgage delinquencies, less distressed sales, and
continued positive housing price appreciation (HPA) for 2017.
We anticipate lower volatility for the structured finance sectors
overall, including non-agency RMBS, as they are less affected
by global macro events. We will continue to invest in seasoned
RMBS deals, Fannie and Freddie Credit Risk Transfer deals,
single-family rental securitizations, non-performing (in process
of modification, foreclosure, or liquidation) and re-performing
(modified) loan pools, and new jumbo mortgage issuance.
Areas of concern
– Most sectors within RMBS trade close to their
one-year tight in credit spread. Despite solid fundamentals, we
thus expect the sector to provide coupon income in 2017 versus
outsized total returns. The year 2017 promises to be a year of
changes and transitions. One of the primary changes affecting
all markets will be rising interest rates and tighter monetary
policy. These changes could pressure housing affordability. It
is also possible that the new presidential administration and
Republican-controlled Congress could seek to reform housing
finance and reduce financial regulation in a way that more
actively engages private capital in the market for mortgage
credit, which could change the non-agency RMBS market in
the years to come.
AGENCY MORTGAGE-BACKED SECURITIES (MBS)
Opportunity
– If we have learned anything from 2016, it is to
expect the unexpected. With that in mind, we are anticipating
heightened volatility to persist in 2017. If the post-election
weeks are any indicator, rates may settle into a higher range.
In that case, we would expect lower gross MBS supply, slower
speeds, and a slow start to MBS demand in 2017. However,
once the market senses some stability, we would then expect
to see renewed demand for agency MBS and better spread
performance. MBS continues to have the best liquidity in times
of uncertainty.
Areas of concern
– Given the uncertainty in the 2017 policy
outlook, we feel baseline spread levels should be wider, as
spread volatility in MBS is likely to be higher. The new range
in which MBS is likely to trade is wider. Once details of the
new policy framework become clear, we could see some reversal
on this front. In a potential rally scenario where the markets
fade the recent sentiment injected into the market from the
elections, we think MBS has the potential to outperform and
earn excess interest over comparable U.S. Treasuries. On the
other hand, if the policy direction were to confirm some of the
recent fears, we may selloff further and MBS credit spreads are
likely to widen.
EMERGING MARKETS & NON-U.S. DOLLAR-
DENOMINATED BONDS
Opportunity
– The surprise outcome of the U.S. Presidential
election has continued the global trend of political gains made
by those individuals and parties considered anti-establishment.
We believe that this environment will lead to more frequent
periods of volatility, especially early in a new administration
where policy plans are not yet fully formed. With this backdrop,
we believe opportunities for the emerging markets and non-
U.S. dollar sectors may present themselves early in 2017 for
long-term investors focused on fundamentals. We are close to
long-term averages in terms of portfolio exposures in emerging
markets and near the lower end of the range of our non-U.S.
dollar exposure as a lack of policy clarity and valuations that
look fair to cheap challenge large scale sector shifts at this time.
We remain focused on evaluating issuer level risk and return
attributes to optimize portfolio positioning.
Areas of concern
– Policy development and prioritization of a
new U.S. administration, as well as key elections in Europe in
2017, are areas that require ongoing assessment. In addition,
both emerging markets and local currency markets remain
sensitive to global commodity prices. Various analyses support a
gradual rebound in key commodities during 2017 given the lack
of investment that has occurred in the past two years. However,
OPEC rhetoric/compliance as well as the global growth trajectory
are key to that thesis. Chinese economic activity and policy
may re-emerge as an area of concern. We advocate taking a
highly selective approach within the emerging markets and favor
countries with stable or improving fundamentals and investment
grade corporates over high yield. For the moment, we continue
to prefer U.S. dollar-denominated assets over local currency.
TAX-EXEMPT MUNICIPAL BONDS
Opportunity
– Municipal bond investors will focus on tax reform
in 2017 as it may have a major impact on the overall demand
for tax-exempt income. Investors also are considering the
potential for additional municipal issuance from proposed
increases in infrastructure spending. These two challenges may
present opportunity for the municipal bond market investor as
slower demand and additional supply historically have weighed
on the market, creating an attractive entry point. While recent
municipal bond mutual fund outflows show signs of investor
2017 FIXED INCOME MARKET OUTLOOK
Newfleet Asset Management | 5
concern, history suggests that lowering the top marginal tax
rate has had little impact on municipal rates. With regard to
supply forecasts for 2017, many are actually predicting lower
levels of municipal bond issuance. As we have seen in the past,
stating that infrastructure spending will increase is one thing,
but actually having a project that is “shovel ready” may be a
bit premature. As such, supply may possibly surprise to the
downside. Given the higher yields experienced during the fourth
quarter, taxable equivalent yields may present an attractive
opportunity for investors interested in higher quality, lower
volatility instruments that offer tax-free income.
Areas of concern
– The burden of high fixed costs, including
heavy debt loads and underfunded pension liabilities, will
continue to plague many municipalities. How successfully
municipalities can manage these liabilities will be critical. A
thorough credit review of municipal purchases is imperative in
this market as some issuers are faring much worse than others.
Potential Surprises with Upside
As a relative value fixed income manager, we constantly scour
our markets for attractively valued assets. At times, that means
identifying out-of-favor areas of the market with a catalyst that
will make these areas attractive. The following are a few potential
surprises that could create value in sectors that currently are
either out of favor or considered fairly valued.
There has been considerable talk of fairly restrictive U.S. trade
policies under a Trump administration and their detrimental
impact on emerging markets. If these policies do not materialize,
there could be opportunities. In an early action, Trump has
convinced Carrier to stay in Ohio, saving 1,000 jobs. Though
detailed trade policies are yet to be developed, Trump’s focus
may be on convincing companies (especially manufacturers)
to remain in the U.S., in addition to allowing repatriation of
offshore assets in order to compel companies to produce their
goods in the U.S. We think it is less likely for the U.S. to
impose tariffs with every country with which it trades. If U.S.
trade policy is less restrictive, countries like Mexico, a recent
underperformer, could surprise to the upside.
With protectionist policies less of an offset, Trump’s plans to
boost infrastructure spending and other growth-oriented policies
may accelerate U.S. growth. With the Fed raising rates based on
its assessment of economic data, the investment environment
could be more conducive than anticipated for corporate spreads
(both investment grade and high yield) to tighten. An improving
economy should lead to better corporate earnings, better
fundamentals, and fewer defaults, which in turn would extend
the current credit cycle. Though too early to predict at this time,
accelerating U.S. growth could lead to outperformance of U.S.
corporate debt in 2017.
Within the securitized sectors, ABS, CMBS, and RMBS,
a surprise to the upside may be in the offing if the new
administration carries through on its promise to ease regulatory
pressures. A lighter regulatory touch would remove at least
some of the higher risk premia embedded in many securitized
structures. We will seek to take advantage of a loosening of
regulations, should they materialize.
An interesting dynamic that we pointed out last year, and that
we are intent on watching unfold, is how the U.S. dollar reacts
to the Fed raising rates. What may surprise some is that the U.S.
dollar has weakened in the first twelve months after the initial
federal funds rate hike in two out of the last three tightening
cycles. If we experience the same dynamic this time, and global
growth at least meets expectations of 3.0%, a potential surprise
to the upside may come from non-U.S. dollar-denominated
bonds. While we currently are underweight the sector, we could
add higher yielding names on signs of U.S. dollar stability or
global growth rebounding.
Conclusion
We are entering 2017 with a fair amount of uncertainty, much
of it related to the non-traditional candidate who will take office
on January 20. Despite this, many of the same challenges that
characterized 2016 are still present as we enter the new year.
As we wrote at the beginning of this Outlook, President-elect
Trump’s proposed policies are growth oriented, which implies
rising inflation and interest rates. However, we believe the Fed will
stay the course when it comes to letting the economic data drive
monetary policy. While the exact pace and magnitude of future
rate hikes is unknown, we believe there is significant evidence
to support a gradual rise in rates – a positive situation for spread
sectors. There are many sources of uncertainty in the current
environment, including the global trend of political gains made
by those individuals and parties considered anti-establishment;
the ramifications of divergent monetary policy across the globe;
the extent to which the U.S. dollar will appreciate as the Fed
tightens; the path of commodity prices; and the ever present but
unpredictable geopolitical risks. Our 2017 Outlook provides a
guide for the year ahead but our process allows us to be flexible
as situations change. As always, we believe it is important to
stay diversified, have granular positions, and emphasize liquid
investments. We will continue to look for opportunities in all
sectors of the bond market, striving to uncover any out-of-favor
or undervalued sectors and securities.
www.Newfleet.com
IM
PORTANT RISK CONSIDERATIONS:
Credit & Intere
st:
Debt securities are sub
ject to
various risks, the most prominent of which are credit a
nd
interest rate risk. The issuer of a debt security may fail to
make interest and/or princip
al payments. Values of debt securities ma
y rise or
fall in response to changes in
i nterest rates, and this risk may b
e enhanced with longer-term ma
turities.
High Yield-High Risk Fix
ed Incom
e
Securities:
There is a grea
ter level of credit risk an
d price volatility involved with h
igh yield securities than in
ves
tment grade securities.
ABS/
MBS
:
Changes in interest ra
tes can cause both extension and prepayment risks for asset- and
mo
rtgage-backed securities. These securities
are also subject to risks associated with th
e re pay
ment of underlying collateral.
Fore
ign & E
merging Markets:
Investing internationally,
especially in emerging mark
ets, involves additional
risks s
uch as currency, political, accou
nting, economic, and market ris
k.
Municipal
Market:
Events negatively i
mpacting a municipal security
, or the municipal bond market in genera
l, may cause the fund to dec
reas
e in
value.
B
ank Loans:
Loans may be unsecu
red
or not fully col
lateralized, may be
su
bject to restriction
s on resale and
/or trade infrequently
on the secondary market. Loans can carry significant c
redit and call risk, can be difficult to value and have longer s
ettleme
nt times
than other investments, wh
ich can make loans relatively illiquid at times
.
The
Bloomberg Barclays U.S. Aggre
gate Bond Index
measure
s the U.S. investment grade fixed rate bond
market. The index is calcul
ated
on a total return basis
.
Bloomberg Barclays U.S
. Tre
asury Index
measures
U.S. dollar-denominate
d, fixed-rate, nominal debt issued by the
U.S.
Treasury. Treasury bills are excl
uded by the maturity constra
int, but are part of a separate Short T
reas
ury Index. STRIPS are ex
clud
ed
from
the index because their inclusion would result in
doub
le-counting.
Cre
dit Suisse Leveraged Loan I
ndex
tracks the investable market
of the
U.S. dollar denominated
l everaged loan marke
t. It c
onsists of issues rate
d “5B” or lower, meaning that th
e highest rated issues
included
in this index are Moody’s/S&P ratings of Baa1/BB+ or Ba1/BBB+
. All loans are fun
ded
term loans with a tenor of at least
one year and
are made by issuers domi
ciled
in developed countries.
Moody’s National All-Pro
perty Index
is calculate
d dire
ctly from
commercial property
sales transactions using a
repeat sale regression metho
dology. The monthly index is a
b lend of four major
property types (multifa
mily,
retail, industrial and offi
ce) in all markets acro
ss the c
ountry. Indexes are unmanaged, their returns do not
reflect any fees, expenses, or sales charges, and
are
not available for d
irect i
nvestment.
LIBOR:
London
Interbank Offered Rate.
Thi
s commentary is the opin
ion
of Newfleet Asset Management. N
ewfleet provides this communication
as a matter of general information.
Portfo
lio managers at Newfleet ma
ke investment decisions in a
ccordance with specific client gu
idel
ines and restrictions. As a result,
client
accounts may differ in strateg
y and
composition from the informa
tion p
resented herein. Any fac
ts an
d statistics quoted are from
sources
believed to be reliab
le, but they may be incomplete or condensed and we do not guarantee thei
r accuracy. This communication
is n ot an
offer or solicitation to
p urchase or sell any secu
rity, and it is not a researc
h report. Individuals s
hou
ld consult with a q
uali
fied
financial professional before making any inves
tment decisions.
Not all products or ma
rketing materials are
ava
ilable at all firms.
Not insured by FDIC/NCU
SIF or any federal go
vernment agency. No bank g
uarantee. Not a deposit. Ma
y lose value.
Securities distributed
by
VP Distributors, LLC
, member FINRA and su
bsidiary of Virtus Investment Partners, Inc.
5176 12-16 © 2016 Virtu
s Investment Partners, Inc.
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