Thought Leadership

Tax Efficient Fixed Income Market Commentary: 3rd Quarter 2016

October 11, 2016

This commentary reviews the previous quarter and discusses our outlook and investment approach for the coming months.

Commentary Highlights

  • The continued strong performance of fixed income markets during early July contributed to our decision early in the quarter to reduce our average duration targets to a neutral position from being moderately long.
  • Although the Fed funds rate remains unchanged, a growing number of dissenting board members suggests that the threshold for a decision to tighten is quite low.
  • With its elevated pension liability and limited revenue growth, Pennsylvania has lagged the recovery seen in many other states. However, their recent budget agreement was enough to avoid an immediate downgrade from Standard and Poor’s, which had briefly placed the Commonwealth on negative watch in July.
  • The U.S. Census Bureau released preliminary estimates that showed a decline in state and local tax collections in the second quarter, caused by drops in both corporate and individual income tax receipts.

Please click on the link below to download the commentary.