Introduction: The case for fixed income is strong, but which segments of fixed income should investors consider? The answer depends on their specific needs and objectives. The global macro environment is becoming more supportive and valuations have improved considerably. From
Climate change and carbon emissions in particular have recently received a lot of attention from governments, non-governmental organizations (NGOs), businesses and the general public, and rightly so. But we must be wary of carbon emissions tunnel vision and instead take
I'm often asked to give my perspective on the current environment. Before I do, I'd like to take a step back. During most of my career, you could take credit or interest rate risk and do relatively well. This last
I'm often asked to give my perspective on the current environment. Before I do, I'd like to take a step back. During most of my career, you could take credit or interest rate risk and do relatively well. This last
In this 2022 macroeconomic outlook, we would like to provide you with a peek behind the curtain of what our investment teams are seeing in the global investment landscape and how that’s impacting our outlook. Our framework is informed by
In brief In recent decades, negative correlations between stocks and bonds have been a tailwind for asset allocators, but negative correlations have been the historical exception, not the rule. Investors may need to change their expectations given the potential for
What are minicycles? Before the global financial crisis (GFC), credit cycles typically lasted between five to seven years (Exhibit 1). However, since the GFC, more frequent periods of sharp spread widening followed by spread compression have occurred — what we
The US market hit all-time highs during the first quarter and a number of non – US markets joined the march upwards, including the Canadian and European equity markets. Those non-US markets have tended to have a healthy tilt toward
While the markets reflect an optimism borne of nostalgic thinking and a reopening narrative, the global economy faces many structural challenges that demand reflection and attention to what is priced and the cost of misplaced …
The Important Role of Active Management in Defined Contribution Plans While active management has always played an important role in retirement plans, the COVID19 crisis has added new layers of complexity to the active versus passive debate. We observe a
Winners vs. Losers in Credit The extraordinary monetary and fiscal policy measures enacted during the pandemic have added further impetus to the trend of rising corporate debt and less stringent lending standards that began in the aftermath of the global
Most investors came of age during a persistently disinflationary environment. Given the disinflationary demand shock caused by the coronavirus pandemic, that backdrop is likely to endure for the next several years. However, the combination of massive unconventional monetary policy and
Investment Insights Rethinking Diversification for Non-US Based Investors Asset owners globally tend to exhibit a home bias toward locally or regionally domiciled companies and benchmarks, which shows that they tend to be …
Although each asset class has its own features and risks, we believe that mid-cap equities present a strong opportunity in the equity market and deserve consideration for suitable investor portfolios. Mid-caps have performed relatively well over the past decade in
Our contention is that most global asset allocators have been underweight Japan equities for a long time. When we ask investors why this is the case, their rationale usually encompasses a combination of three main assumptions: 1. Japan is a
Target date fund risk profiles should align with evolving participant objectives along the retirement savings journey and we believe fixed income plays a critical role in managing risk. In our view, glide path construction should focus on managing risk and
Monetary accommodation and fiscal stimulus are abundant, but the outlook for many companies is less stellar. Corporate defaults will undoubtedly rise significantly. There is now greater yield dispersion between the northern and southern members of the Eurozone, between high-yield and
White Paper It is telling that asset managers today closely monitor specific themes that would have seemed very niche just 20 years ago, such as the spending patterns of millennials in Asia. Why? Because Asian millennials' spending power has the
Global equity volatility remains elevated after spiking to levels not seen since the global financial crisis as investors sold equities somewhat indiscriminately over the past several weeks. Valuations and corporate profit margins were rich coming into the coronavirus pandemic, priced
After leaving the US Federal Reserve, former Chairman Ben Bernanke described his mindset during the global financial Crisis in terms of outside-the-box results: “We knew we had to step away from orthodox policies and bring new solutions to the table.
Q&A: ESG and Fixed Income Across the globe, fixed income investors are increasingly interested in environmental, social and governance (ESG) issues. MFS Research Analyst Mahesh Jayakumar explains how MFS® incorporates ESG factors into fixed income research and looks at the
Investment Insights In brief The UK retirement industry is on course for meaningful changes in 2020. We observe the following forces as continuing to shape it: ■ Low bond yields and a lower-returning investment environment ■ The continued rise in
In brief Negative returns to Value factors over the past ten years might lead one to conclude that such factors' returns will also be challenged going forward. Momentum has had relatively better returns over the same period but has also
Corporate earnings remained weak through the first three quarters of the year, but expectations of a better 2020 outlook pushed global equity prices higher during the third quarter, with equities in the United States logging their strongest performance since 2013…
In brief ■ Negative returns to Value factors over the past ten years might lead one to conclude that such factors' returns will also be challenged going forward. Momentum has had relatively better returns over the same period but has
Financial markets are signaling all is well, buoyed by cooling trade tensions and ongoing monetary accommodation. We question the sustainability of this view. I spent the first two weeks of November traveling in Asia, discussing fixed income markets and the
In brief Volatility diminishes the rate at which an investment grows over the long term and has a negative relative impact on portfolio returns. The actual compounded rate of return on an investment is less than the average rate of
In brief: Investors are increasingly frustrated after years of non-US equity underperformance While US fundamentals appear to be superior, a closer look suggests the gap may be narrower than it seems With financial alchemy potentially reaching its limits, true fundamentals
A review of the week's top global economic and capital markets news. For the week ending 22 November 2019 As of noon on Friday, global equities are on pace to close modestly lower on the week. The yield on the
Corporate earnings expectations have continued to fade as the impact of a global growth slowdown and related trade frictions take hold at the company level. Trade tensions between the United States and China remain elevated though negotiations aimed at reaching
For the week ending 15 November 2019 As of noon on Friday, major US equity indices are on pace to close at record highs as fears of recession dissipate and hopes for a US-China trade agreement endure. The yield on
US and China trade-related uncertainties and the associated financial risks are unlikely to be resolved soon. A company's ability to weather the tariff-related headwinds of rising costs, compressing margins and the potential loss of market share depends on its ability
Corporate earnings expectations have continued to fade as the impact of a global growth slowdown and related trade frictions take hold at the company level. Trade tensions between the United States and China remain elevated though negotiations aimed at reaching
Fans of the film Toy Story will recognize Buzz Lightyear’s spunky catchphrase “To infinity and beyond!” Well, interest rates around the world are navigating their own journey, voyaging toward the abyss of the yield universe rather than its outer limits,
