Rising inflation and slowing global growth are two dominant themes casting a pall over the current market environment. With increasing geopolitical uncertainty, tightening monetary policy, supply chain challenges and higher commodity prices at play, a period of global stagflation could potentially be on the horizon.
Navigating the foggy road to normal has never been more challenging, but with a long-term lens one can better understand the strong normalising effect that disinflationary forces such as rising debt levels, technological advancements and aging demographics could have. Having a clear understanding of these can help investors better find their way.#
Investing in fixed income during a time of a high inflation and rising rates can seem worrisome. However, today’s starting yields offer an attractive entry point for investors. Yields across fixed income sectors are sharply higher than their lows over the past few years. For example, global investment-grade (BBB/Baa and above) corporate bonds currently offer a yield of 4.51%, which is higher than the 4.12% yield offered by global high-yield corporate bonds during their recent lows.
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Past results are not a guarantee of future results. The information included on this page is neither an offer nor a solicitation to buy or sell any securities or to provide any investment service. Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. The American Funds are not registered for sale outside of the United States.
While Capital Group uses reasonable efforts to obtain information from third-party sources which it believes to be reliable, Capital Group makes no representation or warranty as to the accuracy, reliability or completeness of the information.
The information included in this page is of a general nature and does not take into account your objectives, financial situation or needs. Before acting on any of the information you should consider its appropriateness, having regard to your own objectives, financial situation and needs.
The information included in this page has been produced by Capital International Management Company Sàrl (“CIMC”), which is regulated by the Commission de Surveillance du Secteur Financier (“CSSF” –Regulator of the Luxembourg financial industry) and its affiliates, as appropriate (“Capital Group”).
