As Interest Rates Rise, GMO Watches For Shift to "Unloved" Stocks

As interest rates rise and fall, so, too, do the fortunes of various corporate enterprises. JPMorgan Chase today announced a 17% rise in first-quarter profit due, in part, to expanding lending margins as interest rates moved higher. GMO, in an April white paper titled “For Whom the Bond Tolls: Low Rate Beneficiaries in a Rising Rate Environment,” notes that a wide range of firms may be about to benefit – even if interest rates don’t rise as much as anticipated.

Interest rates rise - Watch out for "bond surrogates"

As interest rates dropped to historic levels following the Global Financial Crisis, GMO’s Neil Constable and Rick Friedman note that “an unusually disparate group...