Charting our Focus

 

Finding Income Requires Experience and Flexibility

Source: Bloomberg, Bank of America, and Amundi US as of July 29, 2022.  Data based on past performance, which is no guarantee of future results. See Terms and indices below for more information

   

Attractive income opportunities abound, but we believe finding them in a changing interest rate landscape requires a flexible approach

A flexible approach to income opportunities is especially important during periods of rapid changes in interest rates. Today’s structurally higher rate regime is fundamentally changing the yield profile and valuations of securities across equities and fixed income. 

Finding income today may require digging below the surface into small or micro asset classes. Looking at the chart, we can see how yield opportunities presented themselves in different magnitudes at different times, and across the globe. Yields from non-traditional income assets, including non-fixed income, can offer investors more diversified1 income opportunities. 

Frequent changes in valuations and opportunities for income mean investors can benefit from the flexibility to invest across different income opportunities as yield changes reveal themselves. 

We suggest investors remember these principles when looking for income: 

  • The opportunity set of yields shifts over time, even across fixed income vs. equity.
  • Sometimes investors may want to search beneath the top layer asset class to seek smaller asset classes with potentially more attractive yields. They might be in Asian Financials, or European Energy, for example.
  • The equity market corrections that have been occurring can also generate improved upside potential for yield opportunities in equity-linked notes, albeit with increased potential risk.

Investors may not want to relegate themselves to one source or class of income; access to many sources of income can prepare investors for rapidly changing opportunity sets. Experienced asset managers can offer the skill needed to find and leverage those opportunities. Global macro opportunities shift over time. We are in a significant shift now, and new opportunities abound. Are you ready? 

1Diversification does not assure a profit or protect against loss.

   

Opportunity to Explore

In this environment, we believe an active approach to investing may be advantageous. 

Pioneer Multi-Asset Income Fund is an income solution that uses a flexible, multi-asset approach to seek income across the global landscape. Since the Fund’s launch in 2011, flexibility has allowed it to adapt the asset allocation to evolving market conditions, to seek a high level of income for its investors. 

LEARN MORE

Terms and Indices

US Treasury is represented by the Bloomberg US 7-10 Year Treasury Bond Index. Municipals are represented by Bloomberg Municipal Bond Index. US IG (Investment Grade) is represented by the Bloomberg US Aggregate Bond Index. US Agency is represented by the Agencies component of the Bloomberg US Aggregate Bond Index. US High Yield is represented by the ICE BofA US High Yield Index. Global Equities are represented by the MSCI ACWI NR Index. Europe World Energy is represented by Bloomberg Europe Energy Index. South Korea Financials are represented by MSCI Korea Financials Index. Japan Financials are represented by MSCI Japan Financials Index. World Telecom is represented by MSCI World Telecom Services Industry Group Index. Bank Loans are represented by S&P/LSTA Leveraged Loan Index. Indonesian 10 Year Treasury is represented by Indonesia Government Bond Generic Bid Yield 10 Year Index. MLPs (Master Limited Partnerships) are represented by the Alerian MLP Total Return Index. Global Real Estate is represented by ICE BofA Global Real Estate Index.

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of 7/29/2022. 

A Word About Risk: Pioneer Multi-Asset Income Fund

The market prices of securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, recessions, inflation, changes in interest or currency rates, lack of liquidity in the bond markets, the spread of infectious illness or other public health issues or adverse investor sentiment. All investments are subject to risk, including the possible loss of principal. Pioneer Multi-Asset Income (“MAI”) Fund has the ability to invest in a wide variety of securities and asset classes. Equity-linked notes (ELNs) may not perform as expected and could cause the fund to realize significant losses including its entire principal investment. Other risks include the risk of counterparty default, liquidity risk and imperfect correlation between ELNs and the underlying securities. High yield bonds possess greater price volatility, illiquidity, and possibility of default. Investments in fixed income securities involve interest rate, credit, inflation, and reinvestment risks. As interest rates rise, the value of fixed income securities falls. Prepayment risk is the chance that an issuer may exercise its right to prepay its security, if falling interest rates prompt the issuer to do so. Forced to reinvest the unanticipated proceeds at lower interest rates, the Fund would experience a decline in income and lose the opportunity for additional price appreciation. The Fund may invest in mortgage-backed securities, which during times of fluctuating interest rates may increase or decrease more than other fixed-income securities. Mortgage-backed securities are also subject to pre-payments. The Fund may invest in subordinated securities which may be disproportionately adversely affected by a default or even a perceived decline in creditworthiness of the issuer. International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. The Fund may invest in inflation-linked securities. As inflationary expectations increase, inflation-linked securities may become more attractive, because they protect future interest payments against inflation. Conversely, as inflationary concerns decrease, inflation-linked securities will become less attractive and less valuable. The Fund may invest in insurance-linked securities (ILS). The Fund could lose a portion or all of the principal it has invested in an ILS, and the right to additional interest and/or dividend payments with respect to the security, upon the occurrence of a trigger event that leads to physical or economic loss. ILS may expose the Fund to issuer (credit) default, liquidity, and other risks. The Fund may invest in floating rate loans. The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer’s obligations or may be difficult to liquidate. The Fund may invest in underlying funds, including ETFs. In addition to the Fund’s operating expenses, investors will indirectly bear the operating expenses of investments in any underlying funds. Investments in equity securities are subject to price fluctuation. Small-and mid-cap stocks involve greater risks and volatility than large-cap stocks. The Fund may invest in Master Limited Partnerships, which are subject to increased risks of liquidity, price valuation, control, voting rights and taxation.  The Fund may invest in zero coupon bonds and payment in kind securities, which may be more speculative and fluctuate more in value than other fixed income securities. The accrual of income from these securities are payable as taxable annual dividends to shareholders. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The Fund may invest in credit default swaps, a type of derivative, which may in some cases be illiquid, and increases credit risk since the Fund has exposure to both the issuer of the referenced obligation and the counterparty to the credit default swap. The Fund and some of the underlying funds employ leverage, which increases the volatility of investment returns and subjects the Fund to magnified losses if an underlying Fund’s investments decline in value. There is no assurance that these and other strategies used by the Fund or underlying funds will be successful. Please see the prospectus for a more complete discussion of the Fund’s risks.

The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product.

Investing in mutual funds involves significant risks. For complete information on the specific risks associated with each fund, please see the appropriate fund’s prospectus or fact sheet, available on our  literature page.

Individuals are encouraged to seek advice from their financial, legal, tax and other appropriate professionals before making any investment or financial decisions or purchasing any financial, securities or investment-related product or service, including any product or service described in these materials. Amundi US does not provide investment advice or investment recommendations.

Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your financial professional or Amundi US for a prospectus or summary prospectus containing this information. Read it carefully. To obtain a free prospectus or summary prospectus and for information on any Pioneer fund, please download it from our  literature section.

Securities offered through Amundi Distributor US, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer mutual funds, Member   SIPC.   

Not FDIC insured | May lose value | No bank guarantee Amundi Asset Management US, Inc.  Form CRS         Amundi Distributor US, Inc.  Form CRS