Western Asset Managed Municipals Fund · NYSE:MMU
Western Asset Managed Municipals Fund — Investor Presentation (January 2024)
15 slides from Western Asset Managed Municipals Fund's investor presentation, Jan 18, 2024
Slide 1: Macro Opportunities Strategy Update—The Impact of Global Optimism
Macro Opportunities Strategy Update —The Impact of Global Optimism January 18, 2024 Prashant Chandran, CFA Elliott R. Neumayer Portfolio Manager Product Specialist 0
Slide 2: Macro Opportunities: Why Now?
Macro Opportunities Why Now? We believe Macro Opportunities is favorably positioned to realize attractive absolute and excess returns in the year ahead. Over time, as the backdrop of receding inflation continues, short rates should eventually be reduced. The prospect of lower rates supports our
Slide 3: 2024 Global Outlook
2024 Global Outlook Disinflation ongoing but uneven Central banks will ease policy to normalize real interest rates Economy has remained resilient, but is set to slow Fixed-income outlook US growth will slow but should avoid recession Global growth has downshifted and China is now a source of de
Slide 4: Global Disinflation Is Broad-Based and Ongoing
Global Disinflation Is Broad-Based and Ongoing Advanced Economies: Composite CPI Percent Change Year over Year, Seasonally Adjusted, 2015=100 Eurozone Inflation 10 12 8 10 6 8 Percent Percent 6 4 4 2 2 0 0 -2 -2 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2013 2014 2015 2016 2017 2018 2019 202
Slide 5: US Labor Market Moving Back Towards Balance
US Labor Market Moving Back Towards Balance Demand moderating, supply improving Employment Growth by Sector 3 Month % Change, Annualized Rate Labor Force 8% 115 Information, Native Born Foreign Born Index, Dec 2019 = 100 6% Trade/Transportation, 110 Leisure/Hospitality 105 4% Other 100 2% 95 0% 90 -
Slide 6: 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 7: Sector Exposure
Sector Exposure Macro Opportunities December 31, 2023 Major Key Rate Duration (yrs) Sector Exposure (%) Currency (%) 6 Month US -1.67 Peripheral Europe 0.2 United States 74.6 Municipals 0.8 Mexico 9.5 2 Year US 4.19 MBS/ABS Japan 6.2 12.1 Australia 4.1 5 Year US -0.50 IG Financials 5.7 India 4.0 IG
Slide 8: Interest Rates Remain Elevated
Interest Rates Remain Elevated 10- Year Real Yields Market and Fed “Neutral” Rates 3.0 5.0 US Treasury 30-Year 1-Month Rate 2.0 4.5 FOMC Long-Run Dot US 4.0 1.0 3.5 0.0 Percent Germany 3.0 -1.0 2.5 -2.0 2.0 UK -3.0 1.5 -4.0 1.0 2012 2014 2016 2018 2020 2022 2024 2012 2014 2016 2018 2020 2022 2024 So
Slide 9: Corporates Have Solid Cash Flow and Debt Metrics
Corporates Have Solid Cash Flow and Debt Metrics Profit Margins 34 32 30 Percent 28 26 24 22 20 1Q04 1Q06 1Q08 1Q10 1Q12 1Q14 1Q16 1Q18 1Q20 1Q22 ~180 Non-Financial Companies (JULI Based) Weighting based on amount of debt in the benchmark Source: J.P. Morgan. As of 30 Sep 23 Median Leverage: Non-Fin
Slide 10: The USD and Commodities: Key Emerging Market Drivers
The USD and Commodities: Key Emerging Market Drivers EM central banks are closer to the end of the tightening cycle relative to the developed world USD relative strength and commodity prices are both inputs into EM economic conditions and returns A Fed pause coupled with moderate economic grow
Slide 11: Historical Contribution to Risk
Historical Contribution to Risk Macro Opportunities Ex-Ante Volatility April 30, 2013 – December 31, 2023 Historical Contribution to Risk Duration/Curve Foreign Exchange Spread Credit And EMG Idiosyncratic Credit Default Inflation-Linked Spread Gov-Related Swap Spreads 120 100 Share of Ex-Ante Volat
Slide 12: Macro Opportunities: Why Now?
Macro Opportunities Why Now? We believe Macro Opportunities is favorably positioned to realize attractive absolute and excess returns in the year ahead. Over time, as the backdrop of receding inflation continues, short rates should eventually be reduced. The prospect of lower rates supports our
Slide 13: Questions & Answers
Questions & Answers 12 OA WESTERN ASSET
Slide 14: Thank you.
13 Thank you. Gan Gur \—-WesTERNASSET Np
Slide 15: 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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