Fixed Income Investment Strategy — June 2025

June 2, 2025 — Fixed Income Investment Strategy provides an overview of Sage’s market outlook and sector positioning.

Market Outlook

• Bond markets have come under renewed pressure due to shifting sentiment from US–China trade optimism, a US credit outlook downgrade, and rising fiscal concerns, leading to a 30 basis point increase in yields and global curve steepening.
• Despite increased rate volatility, yields have remained range-bound since the Fed paused tightening in Q3 2023, with the Bloomberg US Aggregate Bond Index yield hovering near 4.83% amid a weakening in sentiment-driven indicators.
• With economic growth expected to slow and the Fed likely to consider rate cuts by year-end, core fixed income remains attractive, supported by strong all-in yields, relative value, and a strategy focused on yield carry, security selection, and low portfolio risk.