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RELATIVE VALUE SAYS 3% WON’T HOLD

  • Scott Carmack
  • Apr 23, 2018
  • 1 min read

Updated: Mar 11, 2024




A number of fund managers have indicated that a 3% yield on the ten-year yield is where they would increase treasury positions. Even if this is the case, they are highly dependent on asset flows since they are sitting on historically low levels of cash. Meanwhile, the $2 Trillion of fixed-income fund inflows is in jeopardy of reversing. After all, fund flows tend to mimic performance, and fixed-income performance over the last year has been less than robust.

 
 

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Holbrook Income Fund

Holbrook Structured Income Fund

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The Fund invests in fixed income securities or derivatives, the value of your investment in the Fund will fluctuate with changes in interest rates. These risks could affect the value of a particular investment by the Fund. Investment in or exposure to high yield (lower rated) debt instruments (also known as “junk bonds”) may involve greater levels of interest rate, credit, liquidity and valuation risk than for higher rated instruments. When the Fund invests in other investment companies, including ETFs, it will bear additional expenses.

 

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ABS may be more sensitive to changes in interest rates and may results in prepayments which can include the possibility that securities with stated interest rates may have the principal prepaid earlier than expected, which may occur when interest rates may have the principal prepaid earlier than expected, which may occur when interest rates decline. Rates of prepayment faster or slower than expected could reduce the Fund's
yield, increase the volatility of the Fund ad/or cause a decline in NAV.

The Holbrook Income Fund is distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Holbrook Holdings Inc. is not affiliated with Northern Lights, Distributors, LLC.

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