Climate change, net zero and the employment myth Responsible Investment | February 2021 The world is changing and not just because of climate change. How companies and governments respond to the change will have significant implications, economically and competitively as
The Texas Power Market Crisis Winter hit with a vengeance in Texas during the week of February 15 significantly impacting electricity production in the state. Extreme cold temperatures in the region affected the entire electric grid leading to massive rolling
The green decade The Long View There is no shortage of challenges for long term investors. The strong performance of risk assets in 2020 has further compressed return expectations, and there exists ongoing concern about (i) how economies will emerge
After a short breather at the end of January, the reflation trade is back. Bond yields have jumped, with 10-year Treasury yields rising 33 basis points and 10- year German Bunds climbing 22 basis points since the beginning of February.
In our white paper, The Mystery of SOE Debt, published in September 2020, we demonstrated that State-owned Enterprise (SOE) defaults are rare. In this update, we clarify that our SOE investment process excludes SOEs of the variety currently defaulting in
Analyzing multi-asset portfolio risk during COVID and beyond The extraordinary market movements of 2020 had a considerable impact on the correlations between major asset classes. Some long-established interactions, such as the co-movement of share prices and sovereign yields, decoupled or
Why emerging Asian assets will grab a greater share of global investors' portfolios. A year after the Covid-19 outbreak triggered widespread social and economic upheaval, Asia is emerging out of the crisis stronger and with greater influence on the world
What will be the key factors driving EM debt markets in 2021? The market seems very positive on the global backdrop — do you agree with the consensus views? How will this impact emerging market debt? In spite of the
BNPP AM has restructured the BNP Paribas Human Development fund, now renamed BNP Paribas Inclusive Growth, and managed using a new investment strategy focused on inclusive growth1. It aims to generate returns through investment in companies with a proactive approach
The ESG Opportunity for Corporate Directors. Is our board focused on the right issues? Does our board have the appropriate skills and governance process for effective ESG oversight? Is the company taking a strategic or tactical approach to ESG? Is
The rally in global equity markets since November has been driven importantly by an optimistic outlook for management of COVID-19, and recent developments suggest this outlook is coming to pass. As seen below, the number of COVID-19 cases in the
Downgrading government bonds Weekly commentary We broaden our tactical pro-risk stance in light of major developments since the publication of our 2021 outlook in December: the vaccine rollout and up to $2.8 trillion of additional U.S. fiscal spending this year.
U.S. Treasury yields rose and the yield curve steepened, as economic data came in stronger than expected. Spreads in non-Treasury sectors generally tightened, though emerging markets spreads widened amid brief dollar strength. Loan funds saw a sixth consecutive weekly inflow,
This article assesses the communication of the European Central Bank (ECB) using Natural Language Processing (NLP) techniques. We show the evolution of discourse over time and capture the main themes of interest for the central bank that go beyond its
Volgens BNP Paribas Asset Management zijn er volop redenen om te veronderstellen dat de Chinese aandelenmarkt de plek is om lange termijn alpha te behalen.
Policymakers globally are increasingly supportive of the climate transition. Europe recently announced its ambitious plan to reduce emissions by 55% by 2030, in line with its plan for climate neutrality by 2050. China has committed to carbon neutrality by 2060, Japan and South Korea by 2050. More than 50% of global GDP is …
Deze zomer hebben het kabinet en sociale partners overeenstemming bereikt over een vergaande herziening van het pensioenstelsel. Dit pensioenakkoord heeft grote gevolgen voor hoe pensioen wordt opgebouwd en wordt belegd. In deze serie bespreken we het pensioenakkoord en de gevolgen voor het beleggingsbeleid.
In these extraordinary times the investment potential in Chinese equities remains extraordinary. This might sound debatable given current global uncertainties, but at BNP Paribas Asset Management, we believe the long-term growth prospects of the China’s vast, diverse equity markets and a steady move towards sustainable, quality growth …
In the markets, the biggest opportunities and the biggest risks arise when you have a confluence of unsustainable flows of money and credit forming prices that discount unlikely future economic scenarios. Today, we see a number of such …
Institutional investors often pose the question of how factors perform across economic cycles. The concept of a normalized cycle has come under pressure in the post-Global Financial Crisis (GFC) era that has seen sustained quantitative easing (QE), financial repression and lower …
ince the Dutch East India Co.’s public share offering in 1602, public markets have allowed for people of all walks of life to help cultivate, contribute, and profit from a capitalistic system that has pulled many out of poverty. Over time, technological innovations have made markets more advanced and the barriers to …
Asia’s relatively effective pandemic control in 2020 has enabled a gradual normalisation of domestic demand. Asia remains the engine of global growth …
China has played a very important role – if not the most important role – in the global economy since 2000. Economic reforms and strong growth of the Chinese economy resulted in a global shift of the economic power balance. During most of the 20th century China’s share of the global economy was …
In January, the US Federal Reserve affirmed its commitment to low interest rates for a prolonged period of time under its new monetary policy framework. If anything, with its renewed focus on “broad-based and inclusive” maximum employment and a goal of achieving inflation that averages 2% over time, the …
We studied every EM crisis since 1987 and found that it can be possible to reap excess returns by only investing in the two years immediatly after a crisis, an approach we call “crisis investing”. We define EM crisis as periods when major EM stock markets drew down al least 50%.
As one of the world’s largest economies the US is a key focus for investors. With every country attempting to return to normality following the coronavirus pandemic, we are monitoring when US economic activity might get back on track, as well as other measures of “normality” …
The COVID-19 pandemic has had a significant impact on China’s gold market, leading to a 27% y-o-y drop in the nation’s gold demand in 2020. 1 One consequence of such weakness was the widest …
Sometimes in life, you find yourself “in between.” In between seasons, in between relationships, in between jobs. One season is ending, and the next has yet to begin. This is where markets are now.
This article analyses the impact of the MiFID II research unbundling provisions on EU sell-side research, following their application on 3 January 2018. The MiFID II provisions require portfolio managers to pay for the research that they obtain, either by paying themselves or by passing on that charge to their clients. Concerns have been raised …
The biotech sector has generated stellar returns since its inception and we view it as a strategic pillar of our model allocations. However, the growth advantage is not what it was and we fear the short-term effect of rising bond yields.
One of the pushbacks that investors in fixed income funds often make is: “Can bondholders really influence companies on sustainable issues in the way equity holders can?” It’s a fair question – after all, we provide companies with capital but we don’t own any equity, nor do we have any voting rights. However, to dismiss fixed income investors as mere bystanders would be …
With Chinese New Year celebrations getting underway and 2021 being the Year of the Ox – a symbol of strength and determination – we look at the prospects for Chinese equities. The past several years has seen investors inundated with negative headlines about trade wars and international tensions. But what has been much overlooked is the significant progress China has made in developing its capital markets, which has made investing there more …
Value stocks outperformed momentum by almost 30% in November, but then gave back a third of this by the beginning of 2021 (Figure 1). Is the Georgia vote and Democrat win in the Senate the catalyst that reverses this? US investors did not think Senate control would switch to the Democrats, yet former president Donald Trump alienated centrist votes with allegations of stolen …
The world in 2030 may seem a long way off, but at Capital Group we spend a lot of time thinking about the distant future. “Imagining life in 2030 is not a hypothetical for me,” notes Capital Group vice chairman Rob Lovelace, a sentiment echoed by many of his colleagues. “In the portfolios that I manage, my average holding period is about eight years, so I’m living that approach to investing.”
It was Presidents Day in the US on 15 February and we imagine ex-President Trump will be celebrating more than most after being acquitted in his second impeachment vote. There was, however, less to celebrate in government bond land.
What are the key tools for sustainable investing in fixed income? In a recent episode of Refinitiv’s Sustainability Perspectives Podcast, James Rich, senior portfolio manager, outlined different ways to think about investing sustainably in fixed income. Beyond green bonds, learn about the sustainable megatrends and methods for identifying investable themes.
Bitcoin is again in the news. Some advocates of the cryptocurrency suggest its price is rising because bitcoin is challenging gold’s standing as the one supra-currency, the asset to own when fiat currencies are being debased. Does bitcoin offer something unique as …
When you find yourself in a hole, stop digging.” This time-tested maxim can work well for finding a path out of personal debt. Small behavioral changes can allow people to stop running up credit accounts and start paying them down. But when the “hole” represents …
With Chinese New Year celebrations getting underway and 2021 being the Year of the Ox – a symbol of strength and determination – we look at the prospects for Chinese equities
Markets continued to focus on hopes for a recovery rather than risks. The epidemic seems to be slowing in the United States and in United Kingdom. It appears to be under control in Europe.
Keynesians were fairly united when they were in the policy wilderness, but now that their views are dominant and they can finally seize the levers of macro policy, dissent is emerging. Lawrence Summers is taking issue …
The US inflation numbers published this week by the Bureau of Labor Statistics were slightly below consensus at 1.4% for annual headline inflation, basically unchanged from last month. Quite a contrast compared to the latest German and EU inflation numbers, which were …
While the Biden administration put eradicating the coronavirus at the top of its agenda, taking action on regulations with executive orders has also been a top priority. Deregulation was a defining focus of …
2020 saw unprecedented change around the globe – economically, socially and politically. The most significant impacts resulted from the global coronavirus pandemic which has potentially changed many aspects of life for ever. The investment landscape has been changing too …
2021 began with renewed bouts of volatility with a tug of war emerging between concerns over slow vaccine rollouts especially on the continent and delays in US fiscal support against positive earnings trends.
Equity investors began 2021 focused on the expected level of earnings at the end of the year rather than on the inevitable challenges in generating them. With economies globally …
The economic rebound slowed in the fourth quarter, after a strong rebound in the third quarter and a very sharp contraction in the first half of the year. Global economies remain supported by the large stimulus measures from fiscal and monetary institutions. The positive vaccine …
With Netflix shaping our entertainment choices and Zoom putting faces to our conversations during this extended period of social distancing, the mobile digital revolution that began with four companies in the early days of the 21st century has acquired new players.
In 1952, Harry Markowitz published “Portfolio Selection” and helped usher in the era of modern portfolio theory. Harry’s work showed us that a portfolio’s risk is not defined by the riskiness of its individual assets, but by the extent the portfolio’s assets’ price movements …
With the S&P 500 already gaining around 4.27% year-to-date while COVID-19 still lingers through the western world and the U.S. economy shrunk by 3.5% in 2020, it is time to look at the future of equities.
"Has the tide finally turned for #emergingmarkets #equities after a decade of trailing #US markets? It’s a question we often hear." 5 reasons why EM equities could power ahead in #2021 by @CapitalGroup -> https://www.opiniopro.com/2021/02/capital-group/5-reasons-why-em-equities-could-power-ahead-in-2021/
The underperformance of Value vs. Growth stocks explained
From the winter edition of our VBA Journaal, written by Jeroen Kakebeeke RBA, Investment Risk Manager at PGGM
#valueinvesting #growthinvesting
https://nieuws.cfavba.nl/publicaties/the-underperformance-of-value-vs-growth-stocks-explained/4a37e54d-5361-11eb-8a1e-005056b303d3
Reflation, Flation, What’s Your Nation? https://www.etftrends.com/model-portfolio-channel/reflation-flation-whats-your-nation/ #ETF #tracker
