White papers - all assets – Page 92
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White papersUS economy worries pummel markets
Global stocks fell sharply at the start of the week, with Japan’s benchmark Topix index on Aug. 5 suffering its biggest one-day drop in more than three decades. European shares and U.S. stock futures also declined. Meanwhile Emerging Markets stock indices, mostly in Asia (Taiwan and South Korea), fell into the red and currencies that had benefited from high carry trades funded by the yen, such as those in Latin America, lost ground.
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White papersA time and place for small cap equities
After handily outperforming both large caps and the broader U.S. equity market for the one-year period following the COVID recession in the spring of 2020, small cap stocks have since lagged, despite posting healthy double-digit gains in two of the past three calendar years. This performance gap reflects in part the narrow but persistent market leadership of a few high-flying mega cap technology companies supported by artificial intelligence (AI) tailwinds.
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White papersCentral banks divergences on display
The Fed left interest rates unchanged in its latest policy meeting in July but acknowledged that price pressures are subsiding. This could encourage the Fed to reduce interest rates later this year. Across the Atlantic, the Bank of England (BoE) implemented its first rate cut since early 2020 on abating inflation in the UK. In contrast, the Bank of Japan (BoJ) raised policy rates for the second time this year to control upward pressures on inflation.
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White papersHigh yield: It’s the yield that matters
Despite the focus on credit spreads, yield has proven to be a more reliable indicator of high yield market attractiveness. With a strong correlation between starting yield and five-year forward returns, and a historically high-yielding environment coupled with low projected default rates, the high yield asset class is well-positioned to potentially deliver attractive long-term returns.
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White papers2H 2024 Alternative credit insights: Investing for resiliency
Shifting signals on interest rates create opportunities
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White papersThe case for investment grade private credit
Long a core allocation of life insurers portfolios, broader segments of institutional investors are recognizing the benefits of investment grade private credit. Originally concentrated in private corporates and infrastructure debt, investment grade private credit now includes more specialized areas such as credit tenant loans (CTLs) and esoteric private asset-backed securities (ABS).
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White papersLDI: Elections and market reform competing for attention
Whilst most central banks erred on the side of caution, reticent to commence the monetary easing cycle in response to falling inflation and slowing growth, the ECB was the first to take the plunge. With the downside risks to growth in Europe much higher now given the political and fiscal uncertainty in France, as well as a slowdown in German manufacturing growth, the ECB’s deliberate vagueness on the path of easing has allowed it to retain optionality on future cuts.
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White papersAsia Private Equity: Riding the ‘Three Locomotives
Broadly diversified economies and a limited private equity presence appear to be enhancing regional opportunities for private capital. Private equity is enjoying increased attention in Asia, where global investors are looking for exposure offering diversification from more established U.S. and European markets. In the latest of our interview series on The Changing Asian Landscape, Kent Chen, Head of Asia Private Equity, describes some of the virtues of investing in the “three locomotives” of Japan, China and India, and how Neuberger Berman’s broad Asia platform has enhanced our efforts to provide investors effective access to these opportunities.
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White papersPutting Put-Writing Into Perspective
When equities sputter, market volatility simmers and interest rates remain elevated, we believe underwriting market risk—by writing puts on the S&P 500 Index—can be a capital-efficient strategy for investors seeking to generate a diversified source of income in an uncertain economic environment.
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White papersA Change in Leadership?
As Biden withdraws, we are seeing an historic rotation into small-cap stocks and a growing opinion-polling lead for Donald Trump—are the two things related? “What I write here on Friday could be out-of-date by the time you are reading it on Monday,” said Joe Amato, in last week’s commentary on the rise in political volatility.
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White papersA Soft Landing Is Still a Landing
What do slowing growth, lower inflation, tight credit spreads and a steepening yield curve mean for our fixed income views for the rest of the year? If the big story of the moment in equities is the epic rotation out of mega-cap stocks and into smaller companies, the equivalent in fixed income is the ongoing, sharp unwind of a record-breaking U.S. yield curve inversion.
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White papersGaining an Edge with ESG
In this quantitative research study, we investigate the relationship between environmental, social and governance (ESG) factors and subsequent performance. We believe a systematic approach can provide meaningful exposure to companies that deliver strong ESG performance while potentially increasing overall returns.
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White papersA Framework for Value Investing
As providers of an active value strategy, our team has built an investment framework through study and experience that we believe can lead to persistent outperformance. In this memo we outline this investment process based on a compilation of insights published by our investment team.
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White papersWhy We Believe Quality Is a Good Guide for Value Investing
Value investing involves picking stocks that are trading at attractive prices as determined by metrics such as price book and price earnings. Clients sometimes ask us why Breton Hill takes a quality approach to value investing when so many of our peers are focused on distressed value. In this note we review the history of applying quality to value investing in an effort to improve outcomes. We then conduct an out-of-sample analysis to assess whether this effect still holds in the more recent decade subsequent to the publication of well-known quality papers.
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White papersLDI: July 2024, snap elections, all change but has anything changed?
The first half of 2024 disappointed markets as the large rate cuts reflected in market pricing at the start of the year failed to realise. Central banks erred on the side of caution, reticent to commence the monetary easing cycle in response to falling inflation and slowing growth.
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White papersU.S. Election: The Policy Choice
Putting rhetoric and personality (mostly) aside, we explore key policy differences—and similarities—between the political combatants. The U.S. presidential election continues to heat up, with new surprises seemingly around every corner—from a criminal conviction to an assassination attempt to the late withdrawal of the incumbent. With a new Democratic candidate emerging, the contest has become even more volatile as a closely divided nation inches toward November.
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White papersHigh Yield: A Continued Bright Spot
Compelling income opportunities supported by favorable fundamental and technical conditions continue to attract investors to high yield bonds and loans.
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White papersCLO Equity: 101
From quarterly cashflows to compelling total return potential, CLO equity offers a number of potential benefits. But the asset class is often overlooked, due in large part to its perceived complexity relative to more traditional fixed income investments.
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White papersGen AI: The Next Wave
As artificial intelligence tools gather steam, what’s the potential impact on businesses, investors and the planet? It’s been nearly two years since the “ChatGPT moment,” when OpenAI’s flagship chatbot brought the world face-to-face with the power of generative artificial intelligence (Gen AI) to gather and interpret information, and communicate its findings to users. The moment represented the culmination of years of AI research and development.
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White papersCLOs: The Positive Streak Continues
While CLOs remain well-positioned for the months ahead, we continue to see benefits to staying up in both quality and liquidity.
