For most risk assets, total return is achieved predominantly via capital price return, but not in high yield. Over long-term periods, income tends to drive the bulk of the total return for high yield bonds. In fact, over 100% of
Introduction USD22 billion to USD85 billion in the last 10 years.1 2021 was a stellar year for M&A2 activity, with more than 40,000 deals announced globally.3 Chances are that a fund manager will, at some point, be exposed to a
April saw the coordinated bond and equity sell-off continue as the ECB joined the increasingly hawkish tone out of the Fed and added to heightening growth concerns in the month. Indeed, this shifting in the growth-inflation balance is …
Private markets rebounded in 2021, after a year of pandemic-driven turbulence that suppressed fundraising and deal making. Fundraising climbed to a record of almost $1.2 trillion, up by almost 20 percent over 2020. Growth was widespread across asset classes and
Global stock and bond markets slumped in February as the Russian invasion of Ukraine rattled markets, creating the prospect of a global commodity shock as Western nations moved to sanction Russia, among the world’s largest …
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 de zomer van 2020 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
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
US inflation in January surprised once again to the upside, with the headline and core figures jumping 7.5% and 6% year-over-year, respectively. However, we note that, although these prints are the largest since 1982 and, thus, do worry market participants,
How do you use fixed income derivatives within a portfolio and how do you prepare changes in the market? In this session Neil Schofield looks at Fixed Income risk management, engaging you through Excel activities and interactive questions. You will
Like it or not, the alignment of the planets regarding inflation will last for a while. October saw the recognition of a more permanent than expected inflation, with the IMF officially stating that we are entering a phase of inflationary
Climate change is back at the top of the risk ranking We must be willing to act now to prevent irreversible damage, in spite of the unknown variables and risks. Among experts, climate change has returned to the top spot
At Capital Group, using third-party data is only the beginning of how we monitor potential and current investments. All holdings are reviewed against third-party ESG scores to identify potential ESG risks. Then we draw on our investment …
Faced with unique and diverse challenges, insurance investors have looked to increase their exposure to less liquid markets, such as private debt, over recent years. Private debt is often well-suited to an insurer’s balance sheet and we believe that a
What can we overreact to today? Guess we know the answer to that one. We entered the weekend with investors looking ahead to this week’s Fed meeting and policy decision on Wednesday, plus a full slate …
The concept of matching asset allocation to an individual’s risk preferences has been around for decades. As the theory developed, the concept of lifecycle investing – varying asset allocation according to an individual’s age – was born. In this article,
We would like to invite you to join us for our Classroom session: Principles of Portfolio Construction with professional financial trainer Neil Schofield. In this Investment Academy session, Neil will talk you though how to think beyond individual investment decisions to the broader view of
Investment flexibility may enhance risk-adjusted returns. With the economy continuing to recover from the global pandemic, we believe investors could benefit from an allocation to below investment-grade credit. Equity valuations appear somewhat stretched after a rally that began more than
The EBA has received several mandates to assess how to include Environmental, Social and Governance (ESG) risks into the three pillars of the banking prudential framework. This report assesses their potential inclusion in Pillar 2 by providing common definitions of
Diversification – exposure to multiple risky assets to help reduce portfolio risk – can enable a portfolio to thrive in many different market environments. However, after an exceptional 2020, events so far in 2021 – with US equities outperforming other
The rapid and ongoing adoption of ESG across global industries has seen sustainable investments soar. However, fixed income markets and money markets have been slower to adopt ESG. But why is this and how long will it take for these
Positioning your portfolio for the risks and opportunities ahead. Investors have rarely experienced such an extraordinary period. Just as the 2020 shutdown of much of the global economy by the coronavirus pandemic was unprecedented, the recovery this year is likely to
Downside risk management is crucial. Volatility and low yields are likely to persist over the next few years as the global economy recovers from the shock of the coronavirus. Navigating this environment will be difficult, particularly as returns from equities
Valuations of risk assets have marked a pause in the face of a number of headwinds. In our view, valuations remain underpinned by ample central bank liquidity and the prospect, in the US, of further fiscal stimulus.
One of the most tangible effects of climate change is already well underway – the surge in extreme weather. If there was a VIX for weather, it would be near all-time highs – and trending higher still. Exhibit 2 illustrates this greater weather volatility in …
February saw US fiscal authorities take the baton from the Federal Reserve and surprise on the upside in terms of proposed spending programmes in the months ahead. This served as a tailwind for global equities and a headwind for …
This report contains extracts from the full hardcopy Credit Suisse Global Investment Returns Yearbook. In the Yearbook, renowned financial historians Professor Elroy Dimson, Professor Paul Marsh and Dr. Mike Staunton assess the returns and risks from investing in equities, bonds, cash, currencies and factors in 23 countries and in five different composite indexes since 1900. This year, the database is broadened to include 90 …
While a new year may be underway, at least one thing remains the same: low bond yields. We believe that the challenges and risks this environment presents may not be fully understood by investors. For that reason, we have identified three questions that we believe investors should consider: focusing on the diversification power …
Since the U.S. elections, asset prices have risen steadily higher. Can the risk rally continue? I believe it can as it is underpinned by three powerful drivers. However, there are also three looming risks that could undermine it.
In the first of the series Vincent McEntegart gives his thoughts on the broad market expectations for 2021 and Debbie King presents a short case study on how we use bank equity and bank credit in our income strategies to deliver income plus a strong risk-adjusted return.
A look at the personal investing behavior of Vanguard’s 5 million retail households Vanguard investors have a long-term risk outlook The typical Vanguard household holds a long-term, risk-taking portfolio that's both diversified and balanced. The average portfolio consists of 63%
Outlook If, like a modern-day Rip Van Winkle, you had magically slept through 2020 and then looked at the year-to-date credit returns, you might have thought: “Quite a boring year, then”. Dramatic selloffs have been largely retraced by equally dramatic
Investment Insights Key takeaways Global corporate bonds have recovered strongly since the peak of the sell-off experienced in March. With credit spreads having tightened considerably since then, I believe the rally was justified for technical reasons due to unprecedented levels
Investment Insights The US election results and the announcement of a potential COVID-19 vaccine from Pfizer have been pivotal events in markets, initially providing a substantial boost to risk assets. Mixed economic data and a rapidly rising rate of coronavirus
Investment Insights As emerging markets continue their rise towards becoming one of the key drivers of global growth, improved capital and information flow have brought to the fore alternative ways of investing in the asset class. In this paper, we
#45 November is filled with webinars. This week, you’ve got a lot to choose from. On Wednesday, Capital Group hosts a webinar “Are disruptors the next generation of defensive stocks?” and T. Rowe Price hosts a webinar “US Election 2020
October 30, 2020
Investment Letter Succes vereist nieuw recept op basis van bestaande ingrediënten Het Nieuwe Pensioencontract (NPC) moet een transparanter en persoonlijker pensioen opleveren dat beter aansluit bij de ontwikkelingen op de arbeidsmarkt. Daarnaast moet het perspectief op toekomstige verhogingen van de
Weekly Fixed Income Commentary U.S. Treasury rates closed higher last week, led by longer maturities. A constructive market tone lifted rates and supported risk assets. Prospects for additional fiscal stimulus prior to the U.S. election dimmed, but rates rose nonetheless
An EDHEC-Risk Institute Working Paper This paper employs a robust portfolio sorting procedure to factor size characteristics into returns. The US size anomaly boils then down to a pure seasonal effect, fully supporting the “tax-loss-selling” hypothesis. We build a long-short
Webinar – Climate Risk: Preparing Your Portfolio for the Storm As climate change continues to impact the wider economy and drives further regulation, investors urgently need to incorporate the climate risks and opportunities across all asset classes into their portfolio.
Investment Perspective The relentless run in risk assets over the last five months finally faded a bit in early September, as the S&P 500 fell nearly 8% and the tech-heavy NASDAQ fell 11%. This year’s returns have been heavily influenced
Weekly commentary The broad macro backdrop has been improving, risk assets have rallied a long way, and increasing market volatility points to risks that investors will need to navigate as the U.S. presidential election draws closer. All this leaves us …
This paper presents a simple holistic approach to build climate risk-resilient investment portfolios based on the three key objectives of the Paris Agreement: climate change mitigation, climate change adaptation, alignment of financial flows with a low-carbon, climate resilient pathway. We
Multi-asset | September 2020 Most asset market returns can be distilled down to two basic elements: movements in cash flows and discount rates. In the past month or so, for risky assets such as equities, each has moved in a
This article studies the impact of carbon risk on stock pricing. To address this, we consider the seminal approach of Görgen et al. (2019), who proposed estimating the carbon financial risk of equities by their carbon beta.
Weekly Investment Commentary U.S. equities rallied again last week, with the S&P 500 Index climbing 2.5% as it approached a new all-time high.1 Economic data continued to come in ahead of expectations and corporate earnings results have not been quite
Sovereign wealth funds are often referred to as “rainy-day funds”, pools of cash that their government owners can draw upon in times of economic need. It is hard to imagine a rainier day or a greater …
