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Strong and largely unanticipated macro shocks dominated global markets in 2022, negatively impacting investor returns across a wide range of …
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Tag "Fixed Income"
Strategic Income: Allocation to BB ratings
A new building block within UBP’s Global & Absolute Fixed Income range. The strategy’s objective is to generate high income with a strong BB risk profile. The strategy will have a diversified allocation to the high income …
Outlook for bonds brighter; growth concerns linger
Quarterly macro and market insights: Markets rebounded in the fourth quarter of 2022, closing a year marked by high volatility as the US Federal Reserve (Fed) reset its monetary policy path. US equities gained, credit spreads tightened and interest rate
Securitised credit can be an important diversifier in bond portfolios
As the risk of recession looms large over financial markets, how will securitised credit fare? It’s a growing area of bond markets that has become an important anchor of some actively managed, fixed income portfolios. Portfolio manager Xavier Goss discusses
EMD outlook for 2023: local currency yields offer protection in volatile conditions
Key takeaways Global factors weighing on emerging market debt in 2022 look likely to continue in 2023, but high starting yields within EM local currency debt could help offset subsequent price volatility, while negative outcomes appear to be priced in
Brazil presidential election outcome
Below are some takeaways by Capital Group’s emerging market sovereign debt analyst Thomas Kontchou on important economic and policy considerations given the leftist candidate Luiz Inácio Lula da Silva’s victory in Brazil’s presidential election. The leftist Workers’ Party candidate Luiz
Targeting predictable outcomes to deliver on expectations
Mike Gitlin, Capital Group’s head of fixed income, sets out the importance of investing in bond funds that deliver on their stated objective. He also explains what differentiates Capital Group from industry peers. We’ve heard you talk about the four
Impact Investing in Credit: Debunking Four Common Misconceptions
Fixed Income Impact portfolios can be flexibly managed to client objectives Increasingly, companies are being measured not only by their earnings and cash flow, but according to the effect their activities have on the environment and society. As a result,
The Year of the Bond
The year 2022 proved to be a year of a great reset for fixed income aficionados. Bond prices are sharply lower and yields are meaningfully higher. Following a nearly 15 year period of ultra-low interest rates that starved pensions and
EMEA-Listed ETF Flash Flows
Weekly as of 6 January 2022: ETFs posted strong net inflows of $3.3bn last week. Fixed Income captured $2.6bn while Equity took in smaller …
The PIMCO Glide Path Construction Proces
The savings and investment plan that one follows over the course of one’s working and retirement life is among the most critical decisions an individual can make. The balance between consumption and savings determines one’s overall quality of life, not
EMEA-Listed ETF Flash Flows – 2022 in Review
• ETFs posted more than $88bn of net inflows in 2022. Despite a challenging backdrop with elevated inflation, monetary tightening and war in Ukraine, Equity ETFs …
Looking Ahead to 2023
End and Beginning of an Earnings Cycle In brief: Decelerating inflation should provide a tailwind for high quality bonds but will likely bring the earnings cycle to an end for most companies. Companies with uncompetitive products or services facing elevated
2023 Natixis Institutional Outlook Survey
After the Gold Rush Institutional investors forced to dig deep for opportunity as they brace for inflation or stagflation in post-pandemic markets. After seeming to recover from the pandemic in 2021, the global economy relapsed into what may be classified as a
De geheimen van valuta-afdekking binnen vastrentende waarden
Beleggen in het buitenland betekent ook beleggen in een vreemde munt. Dat kan het leven wat ingewikkelder maken, vooral voor obligatiebeleggers. De post-pandemische divergentie in het monetaire beleid van de centrale banken heeft geleid tot sterke schommelingen op de financiële
Systematic Fixed Income Outlook
Peak inflation appears to have arrived. What’s next? The central bank narrative has shifted from a focus on the pace of tightening to the terminal rate required to bring inflation back down to the targeted level. Throughout 2022, expectations for
The last time investment grade credit looked so good, Pluto was still a planet
People my age and up will remember that for all of us (or since 1930, when Pluto was first discovered), the solar system consisted of nine planets. Then in 2006 a monumental event happened when the International Astronomical Union downgraded
Bedrijfsobligaties uit opkomende markten beginnen te schitteren
Obligaties uit opkomende markten bieden enkele van de aantrekkelijkste rendementen ten opzichte van risico sinds vele jaren, vooral in het licht van de sterke fundamentals van bedrijven en de economie. Professionele beleggers zeggen al lachend dat het VK een opkomende
EMEA-Listed ETF Flash Flows
• ETFs posted net inflows of $597mn last week. Fixed Income captured $691mn while Equity took in smaller net inflows of …
The case for European senior secured leveraged loans
European senior secured leveraged loans are a growing and integral part of the leveraged finance universe. They offer a 10% yield, have positive exposure to rising interest rates (unlike most fixed income), offer credit protections to manage downside risk, and
The end of an era
Monthly Investment Outlook: With the September swoon in risk assets, markets have simply moved to unprice the optimism built up over the summer about the prospects of a pause in Fed tightening …
Green Bonds
Green bonds zijn vooral bekend als instrument om te beleggen in oplossingen om klimaatverandering te beperken. Nu de financiële sector naast klimaat ook verlies van biodiversiteit als urgent materieel risico erkent, is het goed om te zien dat green bonds
Asian fixed income: Careful navigation required
I am cautious on the Asian sovereign outlook due to tightening global financial conditions, weaker Chinese growth and rising regional inflation. Asian sovereign bonds are perhaps more resilient against these waves than many other regions due to the large pool
The Market Effect of Acute Biodiversity Risk: the Case of Corporate Bonds
In this paper, we investigate the relationship between biodiversity and companies, through the lens of corporate bonds. We focus on acute biodiversity events and address biodiversity as a risk, considering its looming losses. We illustrate the material and tangible operational
Te duur wanbetalingsrisico biedt kansen voor obligaties uit opkomende landen
Obligaties uit opkomende markten werden getroffen door inflatie, renterisico's, een stijgende dollar en geopolitieke spanningen. Maar de bezorgdheid over wanbetaling is overdreven. Beleggers in obligaties uit opkomende markten hebben zelden te maken gehad met een meer complexe economische en geopolitieke
Alternative Fixed Income and ESG integration
In this first podcast series on Alternative Fixed Income and ESG we take a look at ESG integration in Alternative Fixed Income: more specifically in Dutch mortgages, Asset Backed Securities and the Government Related Investment Fund. Why invest in Alternative
The case for investment grade corporate bonds
Key takeaways Investment grade corporate bonds could play a vital role in terms of adding balance and resilience as part of a core fixed income allocation within a balanced portfolio. The asset class has provided an attractive alternative to developed
European High Yield: forward looking expectations
As the world faces challenges from weakening growth, inflation and policy tightening, the good news for European High Yield investors is that the underlying strength in the asset class has been on an improving trajectory over the last two decades.
Alternative Investment Solutions: Quarterly Strategy Review and Outlook
During Q3 2022, global markets continued to fall across the board, from equities, to bonds and commodities. No region, sector or style was immune to it. After a relief rally in July, equities fell, and bond yields rose as inflation
Risk-Off, Yield-On
With interest rates higher amid a challenging macro environment, we see a compelling case for bond allocations and are cautious about higher-risk investments
Risk & Reward – Third edition
While most investors are open to equity exposure in a low volatility market, they tend to shy away as volatility increases. To counteract equity volatility, asset managers have traditionally added perceived ‘safe haven’ assets like government bonds to the portfolio.
Obligatiebeleggers en de verleidingen van de Costanza-regel
Moeten wereldwijde obligatiebeleggers, na een moeilijk begin van het jaar, George Costanza van Seinfeld volgen en tegen hun instinct in handelen? Voor obligatiebeleggers zijn het ongelooflijk moeilijke maanden geweest. Er was geen plaats om zich te verbergen, aangezien de meeste
The Default Risk is Overblown
Continued high yield selloffs throughout September and October have put increasing pressure on credit investors. Spreads have blown out to around to 650 bps, which gives an implied default rate 8.6% at the time of writing (Figure 1), approaching the
Flexible fixed income: The pursuit of consistent income streams
Generating income is a key role of fixed income. For investors, the durability of income streams becomes more important amid heightened volatility in both equity and bond markets. Capital Group portfolio manager Damien McCann provides context around …
Obligaties lonken
De reële rendementen zijn in alle klassen van vastrentende waarden sterk gestegen. Dat schept voor beleggers kansen die we al jaren niet meer gezien hebben. Vastrentende waarden maken een heropleving door. Beleggers worden steeds vaker vergoed voor risico's – en
Duurzaamheid blijft belangrijk in opkomende obligatiemarkten
In een verder ongunstige omgeving voor obligatieemittenten en -beleggers ziet de toekomst voor obligaties uit opkomende markten er zonder twijfel groen uit. Stijgende wereldwijde rentes en volatiele markten hebben zwaar gewogen op zowel het aanbod van als de vraag naar
Schroders Credit Lens – Perspective of EUR investor
Credit spreads have narrowed again, especially in the US. Valuations remain more compelling in European credit. While US HY index spread has narrowed, lowest-rated CCC bonds are underperforming and dispersion between issuers is rising. Rising risk-free yields and wider spreads
ESG in de Praktijk Mary-Therese Barton over het engagement met soevereine kredietnemers uit opkomende markten
Praten over thema's als onderwijs of gezondheidszorg met overheden maakt deel uit van onze fiduciaire plicht – en helpt ons een holistische visie te vormen op de landen waarin we beleggen, zegt Mary-Therese Barton, Head of Emerging Market Debt.
Barometer: Donkere wolken aan de hemel
De vooruitzichten voor risicovollere activaklassen zien er minder goed uit omdat renteverhogingen de economische groei wereldwijd blijven afremmen. De vooruitzichten voor de wereldeconomie worden slechter. Naarmate de centrale banken de rente verhogen om de inflatie te bestrijden, zal niet alleen
Investment perspectives: US Mid-term Elections
With only days to go, the wild 2022 midterms continue apace. From Democrats funding “MAGA Republicans” in primary races, to former President Trump trying his hand as kingmaker, to sacrosanct Democrat seats and governorships at risk of being flipped (we’re
Fixed income markets: when short term pain can bring long term gains
2022 has not been a great time for bonds. Year-to-date, the Bloomberg Global Aggregate Index and Bloomberg US Treasury Index returned-20% and -13%, respectively. 1 Meanwhile,risky asset classesalso sold off significantly, whichhas led to many investors questioningthe role of bonds
All-Asset Volatility and the Opportunities in Convertible Bond Arbitrage
Do you know what the US 10-year yield will be in six months’ time? No, seriously. Tell us. We’d love to know. Ever since the Global Financial Crisis, low growth, low inflation and easy monetary policy have allowed investors to
Emerging market debt: an active approach
Emerging market debt (EMD) has already broadened and deepened significantly in the last few decades and as the asset class has developed, it has become more appealing to a broader investor base. Issuance has increased, thereby improving liquidity. Yield curves
Economic outlook dampens as challenges mount
Quarterly Fixed Income Perspectives from Capital Group’s fixed income team: The combination of persistently high inflation, aggressive central banks and tightening financial conditions is weighing on financial markets and global growth outlooks. While valuations across many sectors look compelling after
Hard and local currency bonds provide different routes to returns
Emerging market (EM) bonds are a strategic holding for many investors. But the desired result from an allocation to emerging market debt cannot be achieved without first considering the attributes of hard- and local currency-denominated bonds — the two broad
Capital Group – Webinar – Income opportunities have returned to fixed income: But how can investors navigate uncertainty?
With fixed income suffering its worst period in 50 years against a backdrop of slowing global growth and rising inflation, we unpack current developments and look at the opportunities this has brought to the asset class. Income opportunities are abundant
High-yield update: Default projections up slightly
KEY POINTS: Forecasted high-yield default rates are up slightly since our April 2022 assessment. A deteriorating macroeconomic outlook and geopolitical risks are driving the forecast. Default rates remain well below long-term default rates.
Yields attractive, though headwinds to growth loom
Quarterly macro and market insights: Sharp shifts in expectations for central bank policy and the resultant market volatility underscore the challenges facing investors. The third quarter featured a tale of two halves: An initial rally across markets turned into a
To neutral and beyond
Central bank watch: The global hiking cycle is in full swing. In our analysis, we expect all central banks, except the Bank of Japan (BoJ) and the People’s Bank of China (PBoC), to remain formidable hawks until at least early
EMEA-Listed ETF Flash Flows
ETFs posted net inflows of $1.2bn last week. Fixed Income ETFs captured $744mn, while Equity gathered smaller net inflows …
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