Jenna Barnard and John Pattullo, Co-Fund Managers of Henderson Diversified Income Trust, explain why the performance of the US dollar will be an important component in the economic outlook for 2020.


Bond yields: The level of income on a security, typically expressed as a percentage rate. Note, lower bond yields mean higher prices and vice versa.

Inflation: The rate at which the prices of goods and services are rising in an economy. The CPI and RPI are two common measures. The opposite of deflation.

Manufacturing cycle: The time period between when product manufacturing begins and the time the product is shipped.

Non-cyclical: Companies/industries that provide essential goods such as utilities or consumer staples. While cyclical businesses produce goods and services that consumers buy when confidence in the economy is high, non-cyclicals produce items and services that consumers cannot put off buying regardless of the state of the economy, such as gas, food and electricity.

Reflation: Government policies intended to stimulate an economy and promote inflation.

Yield: The level of income on a security, typically expressed as a percentage rate. For equities, a common measure is the dividend yield, which divides recent dividend payments for each share by the share price. For a bond, this is calculated as the coupon payment divided by the current bond price.

Yield curve: A graph that plots the yields of similar quality bonds against their maturities. In a normal/upward sloping yield curve, longer maturity bond yields are higher than short-term bond yields. A yield curve can signal market expectations about a country’s economic direction.

Money supply: The total amount of money within an economy. The narrow definition of money supply includes notes and coins in circulation and money equivalents that can be converted into cash easily. The broader definition includes various kinds of longer-term, less liquid bank deposits.