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Financial Industry Insights from Advisors Asset Management
On April 05, 2021
AAM Viewpoints – Equity Performance During and After a Period of Rising Interest Rates
The yield of the 10-year Treasury has risen 80% from the beginning of the year until the time of this writing (3/26/21). This got us wondering where we think we might park our money during a time of rising interest rates, and where to rotate to once they’ve peaked. So, we identified about nine periods of rising rates that also had corresponding index performance data. We calculated the median annualized total returns during and after an interest rate rise, then charted it below.
We believe the chart above shows two very interesting things:
If you’d like to dig a little more into the data used for the chart, take a look at the tables below. Looking into the growth-to-value rotation is what began this journey. We’d like to share a few good talking points on how this rotation has some legs. Hopefully they will help you with your asset allocations. We believe that instead of rotating into value in general, investors potentially consider focusing their capital on high dividend paying securities.
Past performance is not indicative of future results.
CRN: 2021-0401-9062 R
This commentary is for informational purposes only. All investments are subject to risk and past performance is no guarantee of future results. Please see the Disclosures webpage for additional risk information at commentary-disclosures. For additional commentary or financial resources, please visit www.aamlive.com.
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