Western Asset Core Plus Bond Fund Class R · NASDAQ:WAPRX
Western Asset Core Plus Bond Fund Class R — Western Asset Management Company — Investor Presentation (October 2024)
13 slides from Western Asset Core Plus Bond Fund Class R's investor presentation, Oct 17, 2024
Slide 1: The Fed and Liquidity Markets
The Fed and Liquidity Markets October 17, 2024 Matt Jones, CFA Kevin Kennedy Julien Scholnick, CFA Head of Liquidity Head of Liquidity Portfolio Manager Distribution Portfolio Management 1
Slide 2: Inflation
Inflation “Inflation has eased, and my FOMC colleagues and I have greater confidence that it is on a sustainable path toward 2%” — Chair Powell, September 30, 2024 Core PCE Inflation 12-Month % Change, AR 6-Month % Change, AR 3-Month % Change, AR 8% 6% 4% 2% Fed Target of 2% 0% -2% Apr 18 Apr 19 Apr
Slide 3: Employment
Employment “We do not believe that we need to see further cooling in labor market conditions to achieve 2% inflation.” — Chair Powell, September 30, 2024 Change in Total Nonfarm Employment 1,000 Change in Goods-Producing Employment Change in Private Service-Providing Employment 800 Change in Governm
Slide 4: US Federal Reserve
US Federal Reserve Fed now cutting, but by how much? “Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral state.” — Chair Powell, September 30, 2024 Fed Funds 6% Fed Funds Forecast Fed Funds Futures FOMC 5% Forecast 4% 3% 2% 1% 0% 2015 2016 2
Slide 5: SOFR Lower, RRP Steady
SOFR Lower, RRP Steady Front-end rates reset to the new Fed Funds target rate, while Treasury supply, along with modestly higher repo rates, may allow RRP levels to trend gradually lower Secured Overnight Financing Rate Reverse Repurchase Agreements Agreements Outstanding October 2023 to October 202
Slide 6: Interest Rates Remain Elevated
Interest Rates Remain Elevated UST 10-Year Real Yields Market and Fed “Neutral” Rates 5.0 5.0 4.5 US Treasury 30-Year 1-Month Rate 4.5 FOMC Long-Run Dot 4.0 3.5 4.0 3.0 2.5 3.5 Percent 2.0 3.0 1.5 1.0 2.5 0.5 0.0 2.0 -0.5 1.5 -1.0 -1.5 1.0 1997 2000 2003 2006 2009 2012 2015 2018 2021 2024 2012 2014
Slide 7: US Treasury Yield Curves
US Treasury Yield Curves High volatility over the last few months US Treasury Yield Curves 6.0 5.0 Percent 30 Jun 24 08 Oct 24 30 Sep 24 4.0 31 Dec 23 3.0 3M 1Y 2Y 3Y 5Y 7Y 10Y 30Y Maturity (yrs) Source: Bloomberg. As of 08 Oct 24 7
Slide 8: Changes in Prime MMFs & Commercial Paper Supply
Changes in Prime MMFs & Commercial Paper Supply Retail Prime MMFs’ growth due to higher rates, Institutional Prime MMFs’ decrease due to regulation US Institutional & Retail Prime MMFs US Commercial Paper Outstandings October 2022 to October 2024 October 2023 to October 2024 900 1,400 800 Retail 1,3
Slide 9: Ultra-Short Bond Funds Stage a Comeback
Ultra-Short Bond Funds Stage a Comeback A representative sample of ultra-short bond funds highlights the opportunity to extend Representative Ultra Short Bond Funds - Estimated Annual Net Flows 2014 2014 to to Year to Date 2024 Year-to-Date 2024 40,000 31,354 30,000 19,056 20,000 15,684 USD (million
Slide 10: 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 11: Questions & Answers
Questions & Answers OA ie WESTERN ASSET Gn. ee 1
Slide 12: Thank you.
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Slide 13: 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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