All Fixed Income articles – Page 64
-
White papersMacroeconomic projections for the Italian economy and fixed income implications
Amid the cost of living crisis, ongoing since last autumn, Italy saw unexpected resilience in Q1 as the initial GDP growth estimate of -0.2% was revised up to 0.1% QoQ. However, there was no good news on domestic demand: a 0.8% QoQ contraction in household consumption does not bode well for the future, as consumer confidence declined further during Q2.
-
White papersOptimising the core – how insurers can enhance fixed income portfolios
Insurers are increasingly looking to broaden their staple diets of traditional fixed income and introduce exotic flavours of credit to the core investment portfolio in order to satisfy their appetite for higher risk-adjusted returns, diversification of risk and greater capital efficiency.
-
PodcastTalking heads – There is resilience in asset-backed securities
Asset-backed securities backed by loans and other credits, from car loans to lending to corporations, face the same challenges as other fixed income segments. These include central bank policy tightening, volatility in inflation expectations and growth worries.
-
White papersAfter the Revaluation, the Slowdown
Our Asset Allocation Committee believes that, whether we enter a recession or not, the expected slowdown and ongoing market volatility could feel like one for investors.
-
White papersCash dethroned: reallocation opportunities for insurers under Solvency II
‘Cash is king’ remains at the forefront of many defensive allocations for insurers operating under Solvency II. However, ultra-low cash rates, rising short-term bond yields and inflation are all a material drag on portfolio returns. We believe it is possible for these insurers to reallocate a strategic part of their cash holdings to potentially higher-yielding, liquid, defensive assets without incurring excessive risks or capital costs.
-
White papersCLOs: Well-Suited for Difficult Economic Times
CLOs are a trillion-dollar market that attracts a wide range of investors seeking attractive yields and diversification. In this Q&A, Melissa Ricco, Co-Head of Structured Credit, shares her latest views.
-
White papersFive Reasons Private Assets May Offer Shelter from the Storm
Given the challenges in today’s market, private assets can offer a number of advantages—from an illiquidity premium, to diversification, to protection from rising rates and inflation.
-
White papersESG journey is set to accelerate in credit markets
Last year global sustainable debt issuance hit a record of over $1.4tn, with the overall sustainable debt universe expanding to near $3.4tn. In the first quarter of 2022 this healthy trend halted temporarily, as high energy prices and rising borrowing costs weighed on market trends.
-
White papersA (stag?)flationary tantrum: assessing the current market sell-off
We are entering a tough phase of the regime shift, as the risks over economic growth add to the already hot inflationary backdrop. This means that stagflation fears will continue to drive the market and risk assets are likely to remain very volatile, particularly the most indebted companies and those with still excessive valuations.
-
White papersThe Fed Makes Inflation Fighting Priority Number One
The Fed raised its benchmark interest rate by 75 basis points yesterday, to a range between 1.50% and 1.75%, and signaled stronger inflation-fighting measures ahead. We think that policy path will eventually cool inflation—but at a greater cost to economic growth than the Fed expects. And financial markets will likely stay volatile for a while.
-
White papersA compelling entry point for MBS
Mortgage-backed securities (MBS) opened 2022 with drawdowns not seen in 40 years and high volatility that tracked the MOVE Index, a measure of uncertainty in the bond market.
-
White papersA Scenic But Treacherous Trail
Aggressive central bank tightening and declining purchasing power suggest the slowdown in growth should be steep, and faster than the inflation slowdown.
-
White papersEmerging Market Green Bonds - Report 2021
Significant investment is required to build resilient economies capable of addressing the current climate and environmental challenges. This need is particularly crucial in emerging market and developing economies (EMDEs), which are relatively more vulnerable to the impacts of climate change. More broadly, large-scale investment estimated to be as high as US$4.5 trillion per year in EMDEs is required to achieve the United Nations Sustainable Development Goals (UN SDGs). -
White papersThe embarrassing legacy of financial capitalism: implications for investors
In the ongoing regime shift, investors have to deal with significant legacies stemming from the previous regime (the one initiated under former Fed Chair Paul Volcker), namely two forms of inflation: asset price inflation over the course of three decades and more recently inflation in the price of goods and services.
-
White papersShifts & Narratives #20 - Stagflation and its roots in capital misallocation
In the ongoing regime shift, investors have to deal with significant legacies stemming from the previous ‘Volckerian’ regime, namely two forms of inflation: asset price inflation over the course of three decades and, more recently, inflation in the price of goods and services.
-
White papersResponsible Lending: The Myth of the Perfect Investment
If building a sustainable bond portfolio sounds tidy and straightforward, it isn’t. The auto industry illustrates the difficulty of finding a perfectly sustainable private sector investment.
-
White papersThe Two-Way Market Persists
In a webinar a few weeks back, my colleagues, Joe Amato and Erik Knutzen, and I sought to size up the market environment of ongoing volatility and selloffs, pressure from the Federal Reserve, and fears about inflation and growth.
-
White papersCross Asset Investment Strategy - June 2022
The repricing of a more aggressive Fed stance has been brutal as the 10Y UST yield temporarily reached the 3% threshold, falling close to 2.75% recently on economic growth concerns. We think investors should move towards neutrality on duration in the US and Europe, whereas in credit, they should focus on quality and stay cautious on higher-risk segments in Europe.
-
White papersThe Path From the Peak
With inflation still above-trend, prices rising for necessities, central banks tightening policy, and fallout from China’s zero-COVID policy, we will watch for a sharp slowdown in growth over the 12–18 month outlook.
-
White papersThe myth of the fiscal free lunch: beware of the trap. An investor’s viewpoint
The idea that there is a comfortable degree of budgetary room for more active fiscal policy goes hand-in-hand with the assumption that a sustained bond correction (higher safe real interest rate) is not only unjustified based on fundamentals, but is also impossible. This comes as no surprise. On average throughout modern history, safe real interest rates have been lower than the GDP growth rate, making it easier to finance public deficits.
