Fixed Income
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White papersNavigating an inflationary environment in US and global equities
Forty years … That’s how long it has been since the Great Inflation, which lasted from 1965 to 1982 and saw inflation in the US climb as high as 13.5%. According to Michael Bryan of the Federal Reserve Bank of Atlanta, it was the “defining macroeconomic event of the second half of the twentieth century … there were four economic recessions, two severe energy shortages, and the unprecedented implementation of wage and price controls”.
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Blog | Spike in nominal yields hit longer-dated inflation-linked bonds YTD
As economies recovered from the Covid-19 pandemic, investors have rotated away from conventional government bonds and sought inflation protection in the reflation trade by switching into inflation-linked bonds. As a result, yields on inflation-linked bonds (IL) fell sharply.
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Climate Transition risk in Fixed Income Insurance Investment
Generali Insurance Asset Management
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Managing Challenges in US Equity and Fixed Income Markets Today
US equity and fixed income markets are facing new challenges. Our Ed Perks shares his latest outlook and investment opportunities across asset classes.
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A word with our expert on green bonds
‘The green bond universe is an attractive alternative to conventional debt’
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Financial Conditions Tighten into the Void
Turning points are always difficult to forecast and even harder to time, which the Fed and investors can attest to as they consider an evolving set of imperfect information. That provides some context to last week’s Fed meeting when it provided candid forward guidance by fortifying expectations for 50 bp hikes at the next few meetings while diffusing speculations about 75 bp increases.
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Constant chaos: 4.669 reasons why car-tech could outpace insurers
Fiorino explores what’s driving change in the car insurance market – and why incumbents may have to get out of the road…
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Could Your Beta Be Better?
In the first of our articles on working with Official Institutions, we look into the importance of regularly questioning the assumptions behind your benchmark.
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US workforce housing: Driving compelling returns and social good
Affordable workforce rental housing is an oft-overlooked category of US multifamily housing investment given the skills and capital required to turnaround assets. Yet, workforce housing could offer institutional investors a scalable opportunity to generate attractive risk-adjusted returns and target high-impact social good. Crucially, with state-funded affordable housing in the US in short supply, owner-operator platforms focused on improving the quality and condition of housing units could help to deliver positive social outcomes for tenants and surrounding communities.
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Upward pressures on inflation are the major market driver
We expect central banks to remain on the hawkish side as long as inflation expectations remain on the upside, as central banks are afraid of losing their credibility. However, the Fed and the ECB are in different positions. The Fed wants to tighten financing conditions to slow demand, as the US economy is running hot. However, the ECB is stuck in an impossible situation: Eurozone inflation is primarily driven by higher energy costs, and a central bank has few “tools” to fight cost-driven inflation without hurting growth.
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50 Is The New 25
The FOMC raised the Fed funds rate by 50bps and announced the beginning of quantitative tightening. Chairman Powell signaled that 50bps hikes will be the new normal for the next couple of meetings, as inflation fears remain. The BoE and ECB also contemplate their paths ahead.
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The Fed is on the Clock
While the U.S. headline GDP contracted 1.4% in the first quarter, we still see solid domestic activities in real terms. In particular, the 9% growth in business fixed investments should spur further economic gains in the medium term, and the 2.7% rise in consumer spending shows consumption remains robust. Weaker inventory building and very weak net exports shaved 0.8 and 3.2 ppts from GDP, respectively, but the widening trade deficits are generally to be expected given the U.S. is leading the economic recovery in the current global business cycle.
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Financing the Future with Bonds that Matter
In the fast-growing field of responsible investing, environmental, social and governance- (ESG-) labeled bonds offer investors an especially appealing proposition by linking financing to sustainability goals. But not all these securities are created equal. Investors with a responsible agenda must make sure the bonds they buy are genuinely helping to create a better world.
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A Value Opportunity in Hybrids
Recent spread-widening appears to reflect concern about rising rates incentivizing extensions, and an economic slowdown incentivizing coupon deferrals—concerns we regard as significantly overstated and a source of attractive valuations.
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Finding the edge in mortgage and consumer loans
The mortgage and consumer loans sector is a long-established and attractive asset class that only opened up to institutional investors relatively recently, as a result of regulatory changes. It offers many advantages, including a highly diverse nature, an entrenched legal framework, excellent growth prospects and inflation protection, as well as the potential for stable and resilient cash flows.
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Crossroads: Politics, Inflation, & Bonds
With a lot at stake for bond investors we investigate where investors can find opportunities in today’s rapidly changing market.
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BDCs Built for the Future
As demand for floating rate assets increases, investment discipline and a wide frame of reference will prove key, says chief financial officer at Barings BDC, Jonathan Bock.
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Adding to the debate: “Is the Fed behind the curve”?
Over the past few months, price hikes above expectations have prompted cohorts of investors to proclaim, “the Fed is behind the curve!” It is a well-known fact that the Federal Reserve’s (Fed) statutory dual mandate is to target both price stability and maximum sustainable employment.
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Investing in green, social and sustainability bonds
Green, social and sustainability bonds provide financial support for projects and activities that have a positive impact on the environment and/or society. Issued by companies as well as governments, these ‘purposeful’ debts are enjoying growing success.
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Corporate ESG Impact Ratings: Concept, Process, and Implementation
The majority of investors acknowledge the importance of evaluating ESG risks and opportunities as it pertains to credit quality, yet the tangible implications can be ambiguous. Does the evaluation only refer to “alpha” risk at the issuer or security level that can affect performance relative to a benchmark, or does it also apply to “beta” risk that can impact absolute returns?
