Multi-Sector Bond Quarterly Update – January 2025
It has been a busy year in fixed income markets, with Q4 2024 proving to be a pivotal period marked by significant global events, including the US election. TwentyFour Asset Management’s Eoin Walsh looks at the path for interest rate cuts in 2025.
Key takeaways
Multi-sector bond market performance
- Despite a rate cut from the Fed in December, their stance became more hawkish, signalling a reduced outlook for rate cuts in 2025. This volatility spread into investment grade markets, with US Investment Grade indices falling nearly two percentage points, while UK Investment Grade indices posted a modest positive return.
- The CLO market performed well, with BBB CLOs returning around 2% and BB CLOs returning 3%.
Market outlook
- We continue to move up the curve in terms of ratings quality, and remain focused on banks, insurance and asset-backed securities.
- We remain tactical with our duration positioning, staying neutral to below neutral on Treasuries.
About the author
About the author