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CIP Quips


In the News:

The Bloomberg Barclays US Aggregate Bond Index was down 2.2% in the 10-month period through October 31, 2018. However, a recent report from the Equity Compass Group at Stifel reminds us that sometimes what goes down must go up. Stifel Senior Portfolio Manager Timothy McCann makes two key points in the report: (1) “Over the last 27 years, bonds have produced a trailing 10-month return of -2.2%, or less, just 3% of the time.”, and (2) “During the 27 year time span when the trailing 10-month returns on bonds have been negative, the returns over the next 10 months have averaged 6.1%”.

The report goes on to suggest that there could be a silver lining when considering that the 10-year US Treasury yield is off its low and at its highest level since 2011, and that the Fed could raise rates at a slower pace than the market currently believes. Furthermore, bonds can still post positive returns in a rising rate environment, assuming rate increases are slow and measured.

Historically, 10-month periods of below average returns tend to lead to positive periods of above-average returns.

What we are thinking:

While this report might offer a feel good analysis of the fixed income market, at Roosevelt, we manage fixed income first as a solution for cash flow needs and secondarily for total return. As income investors, we appreciate that total return includes interest, capital gains, dividends and distributions that are realized over a certain time period. We believe that diversification across industries, maturities and issuers helps to provide consistent and sustainable levels of income, as well as a natural hedge to volatility. In our view, the higher the income in a rising rate environment, the better off your total return can be.



This information is intended solely to report on investment strategies and opportunities identified by Roosevelt. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. References to specific securities and their issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Please contact us at 646-452-6700 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions, or if you would like to request a copy of our Code of Ethics. Our current disclosure statement is set forth on our Form ADV Part II, available for your review upon request, and on our website, www.rooseveltinvestments.com.

Past performance is not a guarantee of future results. Indices are unmanaged and cannot accommodate direct investment. Themes assigned as per Roosevelt Investments’ evaluation. Risk tools may include cash or other securities that we believe possess a low or inverse correlation to the overall market.


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The Roosevelt Investment Group, Inc. is an independent investment management firm that is not affiliated with any parent organization. The Roosevelt Investment Group, Inc. manages equity, fixed income, and balanced assets for primarily U.S. clients. The Roosevelt Investment Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission and notice filed in all 50 states.

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