All Fixed Income articles – Page 54
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PodcastAll the Credit, Ep. 27
Although the traditional asset allocation portfolio mix of 60% stocks and 40% bonds has been a widely adopted investment approach that has spanned decades, a lower interest rate environment coupled with the underperformance of equities and bonds, has investors questioning the validity of the 60-40 asset allocation model. While we also see this portfolio structure as flawed, it’s not for the reasons that others have suggested.
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White papersClimate 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.
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White papersStaying 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.
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White papersAre We There Yet?
Regardless of whether we get a hard or soft landing, we likely face a steep approach to the runway in trying to “land this plane.” The question is, how well consumers and companies absorb the slowdown, and whether sentiment is already bearish enough to create long-term value.
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White papersRelative 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 ...
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PodcastThe Investment Podcast: The mysterious case of the missing distressed deal
As the world tried to make sense of the pandemic, a record number of distressed funds hit the road to raise capital in the expectation of an avalanche of investment opportunities – but this expectation soon failed to meet reality. Riccardo Cumerlato, Biliana Sourlekova and Mustafa van Hien investigate what happened to the missing deal.
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PodcastCLOs: Finding Value in Turbulent Markets
Co-Head of Structured Credit, Melissa Ricco discusses the current state of the collateralized loan obligation (CLO) market. She provides insight into the year-to-date performance of the asset class, the current credit quality picture, and what risks the team is monitoring.
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White papersA word with our expert on green bonds
‘The green bond universe is an attractive alternative to conventional debt’
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White papersHow Ukraine Mission Creep Will Fuel the Next Inflation Wave
And that’s on top of the other risks from war aims that are turning ever more resolute, expansive, and vague.
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White papersConstant 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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White papersCould 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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White papersUS 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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White papersUpward 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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White papers50 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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White papersDoes 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.
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White papersRising Inflation is Not All Bad News for Profit Margins
Concerns over companies’ profit margins continue to mount as the U.S. economy faces the highest inflation since the 1980s. However, we find that some sectors’ margins actually increase in high inflation.
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White papersFinancing 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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White papersA 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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