Fixed Income Investment Strategy — July 2025

July 17, 2025 — Fixed Income Investment Strategy provides an overview of Sage’s market outlook and sector positioning.

Market Outlook

• Markets have weathered a year’s worth of macroeconomic and geopolitical shifts since April, with investor optimism returning and risk assets rebounding, leading to positive returns for core bonds and a 3% YTD gain in the Aggregate Bond Index.
• Despite unresolved macro questions, expectations of tax and Fed cuts, along with a recession-free outlook, support a favorable environment for fixed income, with intermediate duration strategies preferred amid ongoing rate volatility and curve steepening.
• The first-half strategy focused on yield carry and low-risk positioning, with modest duration tilts and selective credit exposure, which continues into the second half, with added credit opportunities and a focus on sectors with short-term tailwinds and low policy risk.