In addition, the U.S. dollar has been strong lately—due in part to expectations for higher inflation—and we are monitoring the dollar’s behavior.

PROTECT: Risk Assist

Last week was quiet, overall, with the Risk Assist portfolios maintaining small de-risked positions across the board. We updated our volatility forecasts last week. They were little changed, leaving most models right between de-risk and re-risk levels.

Expected market volatility moved slightly lower week over week, which tends to occur when an earnings season begins to wind down and uncertainty dissipates. The CBOE Volatility Index (VIX) finished the week at around 15, compared to its long-term average of just over 19.

SPEND: Real Spend

Bond yields were flat across the yield curve last week, with global stock indices and broad-based bond indices posting similar returns. Global stock indices continue to lead performance—up approximately 14% during the past 12 months, versus a slightly negative return for bond indices.

The Federal Reserve Board’s preferred measure of inflation—core PCE—was released last week for the month of March. It showed that inflation over the past 12 months rose by 1.9%—in line with expectations, and 0.3% higher than the year-over-year figure for February.

The Fed statement following its policy meeting last Wednesday contained a few brief comments regarding inflation. The Fed stated that it would accept “symmetric” inflation around its target inflation rate of 2%—implying that a mild overshoot the target would not greatly concern them.

Most fixed-income yield investments were flat for the week while emerging markets bonds fell nearly 1%, for example. That said, equity yield investments rose slightly (with both the REIT and global infrastructure sectors outpacing global stocks).

This article was contributed by Horizon Investments, a participant in the ETF Strategist Channel.