Fixed Income – Page 13
-
White papersMunicipal bonds: an attractive entry point
Municipal bonds have had a rocky start to 2022, but credit quality remains strong. With aggressive rate increases and a shrinking balance sheet, the U.S. Federal Reserve is signaling a quicker move toward a neutral policy rate.
-
White papers
Inflation: Higher but Not Forever
High inflation and the consequences of attempts to curb it are a top concern for today’s investors. We believe that, by hiking rates, policymakers can eventually slow demand enough to subdue price pressures, even in an environment of constrained supply. But this process takes time.
-
White papers
Four Key Findings about the U.S. Yield Curve
The U.S. yield curve attracts a great deal of attention when it is close to inverting given its historical connection with U.S. recessions as well as sharp selloffs in equity and credit markets.
-
White papers
Navigating 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”.
-
-
White papers
Climate Transition risk in Fixed Income Insurance Investment
For insurance portfolios, for reducing the carbon footprint given the limited turnover possibilities, we adopt a gradial asset rotation approach, exiting from poor ESG-rated assets gradually while pushing for change in activist approach via our engagement activities. From an insurance investment standpoint, the expectations in terms of transition risk will most probably result in heightened pressure on prices of high carbon footprint assets.
-
White papers
On the Road Again: Ghana, Kenya, and Zambia
We visited Ghana to better understand the country’s fiscal outlook. Despite recent curbs to government spending, the picture that emerged was concerning. Most measures, such as cuts in ministers’ and top officials’ salaries, have not had a significant impact, nor will a ban on car imports by government ministries. Secondly, politically sensitive and non-discretionary expenditures, like wages for public-sector employees and interest payments, accounts for 53-55% of total expenditures.
-
White papers
Staying Buoyant with Floating-Rate Securitized Products
Investors flock to floating-rate assets during periods of rising interest rates for two primary reasons: they stand to benefit from increasing coupon payments as policy rates rise, and the assets’ minimal duration risk provides insulation during periods of volatility in long-duration assets. Judging by the $53 billion of inflows since the start of 2021, investors are often steered towards leveraged loans when it comes to floating-rate assets.
-
White papers
Relative value in EM local markets
Emerging market (EM) core inflation has risen by less than US inflation, in part due to weak economic conditions within EM and proactive EM central banks. The acceleration of interest rate hikes by EM central banks has driven up real interest rate differentials between EM and the US, making ...
-
White papers
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.
-
White papers
A word with our expert on green bonds
‘The green bond universe is an attractive alternative to conventional debt’
-
White papers
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.
-
White papers
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…
-
White papers
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.
-
White papers
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.
-
White papers
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.
-
White papers
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.
-
White papers
Does the EM debt repricing present a good entry point?
The Russia-Ukraine conflict, a spike in commodity prices and rising global inflation have raised fresh questions about the outlook for emerging markets (EM) debt. Recent forecasts from the International Monetary Fund and World Bank suggest global growth is slowing. And the U.S. Federal Reserve appears set to front-load rate hikes in this tightening cycle, heightening the risk of a recession.
-
White papers
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.
-
White papers
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.
