Western Asset Core Plus Bond Fund Class R · NASDAQ:WAPRX
Western Asset Core Plus Bond Fund Class R — Western Asset Management Company — Investor Presentation (February 2024)
12 slides from Western Asset Core Plus Bond Fund Class R's investor presentation, Feb 28, 2024
Slide 1: Strategy Update: US Core and Core Plus
Strategy Update: US Core and Core Plus February 28, 2024 Travis Carr, CFA Julien Scholnick, CFA Product Specialist Portfolio Manager 1
Slide 2: Core Inflation Right Around Fed's Target Recently, More Disinflation To Come
Core Inflation Right Around Fed’s Target Recently, More Disinflation To Come US Labor Market moving back towards balance US Rent Inflation % Change, Year-over-Year 18% BLS: Rent of Primary Residence 16% 14% Zillow: Observed Rent Index 12% 10% 8% 6% 4% 2% 0% 2016 2017 2018 2019 2020 2021 2022 2023 20
Slide 3: US Growth Moderation Likely to Continue
US Growth Moderation Likely to Continue Change in US Bank Lending Tight Credit Conditions 3 Month % Change, Annualized Rate 30% Savings Rate Likely to Rise 20% High Interest Rates Deter Investment 10% Especially in Housing and Manufacturing 0% Fiscal Impulse a (Small) Drag C&I -10% Consumer Reopen
Slide 4: FOMC Discussion Turns Towards Cuts
FOMC Discussion Turns Towards Cuts But FOMC also forecasts Fed funds remaining well above inflation rate “The question of when will it become appropriate to begin dialing back the amount of policy restraint in place, that begins to come into view and is…also a discussion for us at our meeting today”
Slide 5: Mortgage Credit Offers Attractive Relative Value
Mortgage Credit Offers Attractive Relative Value While real estate prices are expected to cool from the record increases, market spreads are elevated with increased risk premiums During the housing boom of Covid, lending stayed conservative and single family markets remain well supported by long
Slide 6: Emerging Markets: Fed Pivot and Moderate Global Growth are Key Drivers
Emerging Markets: Fed Pivot and Moderate Global Growth are Key Drivers Valuations near all-time lows and EM central banks have started to ease monetary policy Emerging Markets Local Currency vs. Commodities Spot Index 195 70 175 65 Bloomberg Commodities Spot Index (left) 60 155 135 55 115 50 USD USD
Slide 7: US Treasury Yield Curves
US Treasury Yield Curves High volatility over the last few months US Treasury Yield Curves 6.0 31 Oct 23 5.0 Percent 23 Feb 24 4.0 31 Dec 23 3.0 3M 1Y 2Y 3Y 5Y 7Y 10Y 30Y Source: Bloomberg. As of 23 Feb 24 Maturity (yrs) 7
Slide 8: Fixed-Income Valuations are Historically Attractive
Fixed-Income Valuations are Historically Attractive Yield-to-Worst Across Fixed-Income Sectors (Past 10 Years) Current 10-Year Median 14 12 10.1% 10 8.1% 7.8% 7.7% Yield-to-Worst (%) 8 6.8% 6.0% 6.3% 6.1% 5.7% 6 5.1% 4.9% 4.8% 6.3% 6.1% 4.1% 5.6% 3.6% 5.5% 4 5.1% 4.5% 4.7% 3.8% 2 3.2% 2.8% 2.8% 1.5%
Slide 9: Peak Policy Rates Are Historically Good For Fixed-Income Returns
Peak Policy Rates Are Historically Good For Fixed-Income Returns US Aggregate Index Returns after Fed Pause Bloomberg U.S. Aggregate Index Returns Period Rate Hike Event +6mo +1yr +3yr +5yr Mar 1988 - Feb 1989 3.25% Savings and Loan Crisis 9.4% 12.9% 12.3% 11.0% Feb 1994 - Feb 1995 3.00% Bond Market
Slide 10: Questions & Answers
Questions & Answers OA 10 ESTERN ASSET
Slide 11: Thank you.
1 Thank you. rN ; “| WESTERN ASSET
Slide 12: Risk Disclosure
Risk Disclosure © Western Asset Management Company, LLC 2024. The information contained in these materials (“the materials”) is intended for the exclusive use of the designated recipient (“the recipient”). This information is proprietary and confidential and may contain commercially sensitive inform
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