Market News
07/09/2023

Huber Management Says End of Fed’s Rate Hiking Cycle


Vancouver-based investment boutique, Huber Management has identified a unique opportunity for informed investors to capitalize on the apparent conclusion of the US Federal Reserve’s aggressive rate-hiking cycle. With bond prices stabilizing and yields remaining attractive, bond exchange-traded funds (ETFs) are presenting compelling value for those seeking to enhance portfolio diversification and secure steady income streams.

The Fed pauses: A turning point for fixed-income markets

After more than a year of raising interest rates to combat inflation, the Federal Reserve’s September decision to leave interest rates unchanged signals a possible end to the tightening cycle. Market expectations now lean toward rate cuts in 2024 as economic growth moderates. This shift in monetary policy dynamics has created favorable conditions for bond investments.

"We believe the end of the Fed's rate hikes marks a turning point for fixed-income markets," said Bernard Huber, CEO at Huber Management. "Bond ETFs, which have been under pressure during the rate-hiking phase, are now poised for a potential rebound as yields stabilize and investors reassess their portfolios."

Why bond ETFs are attractive now

Bond ETFs, which offer diversified exposure to government, corporate, or high-yield bonds, have seen declining valuations amid rising rates over the past 18 months. However, with the Fed likely to pivot toward a more accommodative stance in 2024, bond prices are expected to recover. Investors who act now could lock in higher yields and benefit from potential capital appreciation as bond markets adjust to a lower-rate environment.

"The current pricing of bond ETFs provides an excellent entry point for long-term investors," added Charlotte Evans, Finance & Operations Manager "Their liquidity, transparency, and cost-effectiveness make them an ideal choice for those looking to reallocate into fixed-income assets at this critical juncture."

A balanced approach to fixed income

Huber Management recommends a balanced approach to bond ETFs, with allocations spanning government bonds for stability, investment-grade corporate bonds for moderate risk, and select high-yield bonds for enhanced return potential. The firm also highlights the value of global diversification, suggesting exposure to international fixed-income markets where yields remain competitive.

"Diversification remains key," noted Charlotte Evans, Finance & Operations Manager "Investors should work closely with financial professionals to align their fixed-income strategies with their broader investment goals and risk tolerance."

Positioning for the new cycle

As markets transition from the rate-hiking era to a potential easing cycle, Huber Management encourages investors to seize the opportunity to enhance their fixed-income allocations. The firm’s research-driven approach ensures clients receive tailored advice to navigate this evolving landscape and capitalize on emerging opportunities.

If you are interested in investing in one of our exciting and lucrative opportunities please see the following steps:

  • Open a Huber Management account and become a valued client or log-in if you are already a client.
  • Speak to an advisor about your investment objectives and requirements
  • Choose from multiple investment vehicles that are tailored to your own specific investment objective.

We offer a full brokerage service to ensure we manage every aspect of your investment strategy including risk analysis and routine updates on your position.

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