This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The “Great Rotation” May Be A “Slow Rotation,” Says Market Vectors’ Fran Rodilosso

Stocks in this article: ANGLBONOCHLCEMLCFLTRHYEMIHY

The so-called “Great Rotation,” an anticipated global shift from bonds to stocks, may take longer than expected to happen as concerns linger over the strength of economic growth in Europe, China, and the U.S., according to Fran Rodilosso, Fixed Income Portfolio Manager at Market Vectors ETFs.

“Despite optimism on the growth front, there are still plenty of signs that growth could lag, potentially confounding the market’s expectations and slowing the pace of the much-anticipated ‘Great Rotation’ from bonds to equities during the course of 2013,” said Rodilosso. “While many economies around the world appear to be strengthening, there are still enough trouble spots, including political upheaval in Europe and an unraveling of some of the recent credit-led growth in China, to potentially undermine a wholesale movement from fixed income into equities this year. Any sort of ‘Great Rotation’ may take us into 2014 or possibly even further out on the calendar.”

“If and when inflation does return, equities may be a good bet,” Rodilosso added.

Rodilosso noted that while the long-term prospects for bonds may still be darkening, those who remain in fixed income may be well served by keeping an eye on duration as a way to mitigate risk. “While lower duration funds and instruments, including floating-rate debt funds, are not paying much yield right now, the opportunity cost for investing in these vehicles is also low, which I think makes them a potentially appealing option from a risk/reward perspective as a place to invest for modest yield or to hold in lieu of cash,” Rodilosso said.

Rodilosso noted that credit risk is not currently high on his list of worries. “If economies do disappoint in the second half of this year, my concerns over credit risk may heighten,” he said. “But I am more comfortable getting extra yield through credit risk than by extending duration.”

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,637.06 +22.25 0.13%
S&P 500 1,948.18 +6.90 0.36%
NASDAQ 4,432.8020 +13.3240 0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs