The Treasury market has had a significant "flight to quality" improvement the last several months. The net result has pushed 3- and 6-month T-bill yields down to 2 and 8 basis points, respectively, while 2- and 5-year note yields are just 35 basis points and 1.50 percent, each. In this low yield environment we believe caution is warranted…
- Treasury yields are extremely low and below the prevailing headline and core inflation readings.
- The yield pick-up for moving beyond non-government focused funds in the front end of the debt markets is not compelling.
- With continued headline risk coming out of southern Europe, obtaining additional return from taking country credit risk is
"limited". The fund's portfolio managers have been aware of this situation and have been managing their portfolios with the risks of Greece and the tie in to the European banking system in mind.
- Diversification between providers and strategies is still prudent in cash and overall fixed income investing.
- A cautious approach to duration management is likely to be needed in the months/quarters ahead.
Statements concerning Commonfund Group's views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Commonfund Group fund. Such statements are also not intended as recommendations by any Commonfund Group entity or employee to the recipient of the presentation. It is Commonfund Group's policy that investment recommendations to investors must be based on the investment objectives and risk tolerances of each individual investor. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund Group. Commonfund Group disclaims any responsibility to provide the recipient of this presentation with updated or corrected information.