Latest Manager Research – Page 243
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White papersGlobal Investment Views - August 2022
The first sequence of the double bear markets (in equities and long-term bonds) adjusting to the end of easy money and rising inflation is almost complete. Now, the narrative has changed, with a shift in focus to deceleration of growth vs fears of inflation.
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White papersJuly 26-27 FOMC Review: Maintaining a Hawkish Course
The Federal Reserve hiked the fed funds rate by 75bp to 2.25-2.50%, the second consecutive 75bp rate hike. The Fed rate decision was widely expected. With today’s rate hike, the fed funds rate is within the 2 to 3% range of estimates of the long-term “neutral” rate. However, as Chair Powell reminded us during his press conference, policy needs to go beyond neutral into restrictive territory this year in order to reduce inflation.
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White papersGas rationing impact on European economy
Russian gas flows to Europe are at a record low level as capacity from Nord Stream 1 has failed to resume fully due to additional maintenance. Gas prices in Europe have jumped again, while EU nations rushed to agree on a coordinated reduction of approximately 15% of gas demand (with country differences) to ensure sufficient gas storage before winter.
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White papersRising rents matter more to REITs than rising rates
Despite the prospect of near-term volatility, REITs are well positioned to help mitigate higher interest rates, sticky inflation and challenging economic conditions, in our opinion.
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White papersWill the Fed’s QT Trigger a Financial Crisis as Growth Slows?
The outlook for Quantitative Tightening will likely depend on the Fed’s commitment to the tool, and, at the first sign of trouble, it may be quick to course correct.
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White papersESG in Equities: Engaging for Progress in Corporate Governance
When it comes to ESG, engagement can not only bring about meaningful change, but also pave the way for value creation—as evidenced by the recent improvements in governance among Japanese corporates.
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White papersDiversity Leaders Open New Doors for Equity Investors
More companies are discovering that policies promoting diversity, equity and inclusion (DEI) are good for business. Equity investors who can find these “diversity leaders” will discover a promising source of return potential, especially in businesses that rely on human capital to drive innovation and business performance.
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White papersAre Carbon Offsets the Next ESG Investing Frontier?
Carbon offsets occupy a relatively small space on the spectrum of environmental, social and governance (ESG) issues. But as more countries and companies commit to net-zero carbon emissions goals, they’re steadily gaining attention from investors as a tool to accelerate carbon reductions. Growing demand has fueled record-high prices in some markets.
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White papersHigh Yield: When Technicals Create Opportunity
Challenging technical conditions have caused high yield spreads to widen beyond what fundamentals would suggest, potentially setting the stage for strong performance in loans and senior secured bonds, in particular.
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White papersIG Credit: Valuations More Attractive, But Uncertainties Loom
Despite the prevailing uncertainty, IG corporate fundamentals appear solid and yields are approaching potentially attractive levels relative to history.
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White papersThree Reasons to Consider CLOs
The combination of wider spreads, strong structural protections and low interest-rate sensitivity presents a potentially compelling case for CLOs.
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White papersCan “Friendshoring” Replace the G-20?
Any vision of closer commercial integration among U.S. allies and partners must be as inclusive as possible.
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White papersCompass - Mind the lag: recession fears flare too fast
Investors expect central banks will tame inflation whatever the cost, even triggering recession if necessary. This may indeed be policymakers’ approach in the short term as they seek to re-establish their credibility. The European Central Bank’s decision to raise rates by 50 bps is a case in point.
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White papersEquity market downturn: Unraveling the decline
In the few months since March 16, when the Federal Reserve (Fed) finally started hiking policy rates in response to spectacularly high inflation, U.S. equities have tumbled. Since Fed liftoff, the S&P 500 has fallen 13%, bringing the total decline since the market’s peak in early January to over 21%—almost erasing all last year’s gains.
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White papers*Mid-year outlook takeaways – Chronicle of a recession foretold*
Investor surveys, and now the US yield curve, indicate a high likelihood of a recession in the US. The question seems not whether there will be a recession, but when. Economist forecasts and earnings growth estimates, however, suggest a recession is not so certain. With growth already slowing more quickly than expected, markets are assuming central banks will not hike policy rates as much as was thought. But inflation may not fall enough to make that possible.
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White papersThe risks around China’s grassroots mortgage ‘boycott’
China is seeing rising numbers of homebuyers stopping their mortgage payments to banks because cash-strapped developers are not delivering the homes they bought off-plan. The question is whether this mortgage ‘boycott’ will result in systemic risk pulling the rug from under the entire financial system.
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White papersTowards a new set of fiscal rules in Europe: an investor view
In the current high-inflation regime, the use of fiscal space must: (1) be rule-based; and (2) preserve the possibility of a cooperative game between monetary and budgetary policies. This use of fiscal space should also help manage investors’ expectations, in order to minimise the risk of ‘sunspot equilibria’, where investors’ beliefs cause prices to diverge from fundamentals.
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White papersPrecautionary Liquidity and Retirement Saving
There is a large debate on the optimal degree of savings’ liquidity in retirement systems. Liquid retirement savings allow people to flexibly respond to life events such as income shocks but can also lead to undersaving.
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White papersTowards new fiscal rules in Europe
After years of dormant peripheral risk, the recent resurgence of fragmentation issues in Europe, amid rising stagflationary risks at a time of Central Banks committing to tame inflation, puts the delicate fiscal and monetary equilibrium under the spotlight. When facing a higher inflationary regime, we call for a new set of fiscal rules designed to overcome the limits of the old overly rigid one size-fits-all framework.
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White papersInflation is Hot—and Could Stay Hot
Autumn and winter should bring respite from the northern hemisphere’s punishing summer heatwave, but we don’t think they will ease the inflation temperature.
