Nine New Evaluation Periods

Nine new evaluation (or display) periods have been added to the main MultiSearch tool, bringing total available now to 57. The new periods all key on events since the Great Financial Crisis, ever more commonly referred to as “GFC.” The same nine have also been added to the Portfolios tool.

The new periods can be found in the Display selection field. They are:

  • Quantitative Easing (QE) 1 – 200812 To 201003
  • Quantitative Easing (QE) 3 – 201206 To 201312
  • Normalization – 201601 To 201812
  • Zero Interest Rate Policy (ZIPR) – 200812 To 201512
  • Obama Bull – 200903 To 201612
  • Trump Bump – 201701 To 201912
  • Dec ’18 Selloff – 201812 To 201812
  • CV-19 Bear – 202001 To 202003
  • QE Infinity – 202004 To 202004

The first two actually coincide with periods of increasing bond yield, which is rather counter-intuitive, since the Fed was actually buying bonds and one would expect yields to go down. But, they actually rose modestly. The yield on the 10-year T-note climbed from about 1.9 to 3.3% during the period known as QE 1 and from 1.1 to 2.3% during QE 3.

QE 3 includes the period in mid-2013 known as the “Taper Tantrum,” where then Chairman Ben Bernanke announced that the Fed would start winding down its emergency practice of buying certain bonds.

The only other time since GFC the 10-year yield approached 3% was during the period of Normalization started under Janet Yellen and continued by Jerome Powell. From January 2016 to December 2018, the Fed Discount Rate rose from 0.3 to 2.4%. The 10-year yield peaked at 3.1% toward the end of that period and has not returned. Since the CV-19 crisis, it now sits below 1%, which is unprecedented.

The last time the 10-year yielded below 3% for an extended period of time was from 1934, during the Great Depression, through mid-late 1950s. More than 20 years!

Bond funds have enjoyed a bond bull market for nearly 40 years, seeing interest rates generally fall from mid-teens in early 1980’s to below 1% today. So, having three select periods that focus on periods of at least modest rate yield increase may help investors assess how their bond funds will hold-up when rates climb again … if ever.

The Zero Interest Rate Policy (ZIRP) period lasted through most of President Obama’s tenure and much of the bull market from March of 2009 through December 2020. The two new periods called Obama Bull and Trump Bump can be used to evaluate fund behavior during an earlier part and then later part of the existing Up Cycle 6 evaluation period (aka post-GFC 11-year bull run).

The shorter Trump Bump period may be especially helpful screening for how younger funds behave during a bull market.

The period called Dec ’18 Selloff requires no explanation.

Finally, and again perhaps a bit presumptive, there is the 3 month CV-19 Bear and the period beginning April 2020 (first full month), called QE Infinity. The latter represents a period of extraordinary monetary measures by the Fed to help mitigate financial impact of CV-19 crisis.

All risk and return metrics and ratings are available across these new periods, as applicable.