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Fixed Income Investing Update: June 2020

Who says Equities Must Have all the Fun?

Whilst equity markets tend to grab all the headlines, fixed income investors just doggedly go about their business, experiencing  a lot of the excitement and volatility, but without being having the braggadocio coverage associated with equity rebounds. Bond markets have also been volatile during the COVID-19 pandemic, which, according to several investment houses, has created a number of opportunities across the fixed income asset class.

As the 'Great Lockdown' seems to be drawing to a close, fixed income investors will begin to get a tentative feel for how fast economies are recovering, whether workers are being re-employed, the implications for inflation, government borrowing and whether further stimulus will be required as new data is released. This selection of papers offers updated institutional asset manager views in the light of fiscal and monetary policy actions implemented to contend with the impact of the COVID-19 pandemic and offers suggestions as to how those actions might affect the fixed income asset class. 

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Global Fixed Income Study 2020 (Invesco)

For compliance reasons, this paper is only accessible in certain geographies

Invesco's deep dive into fixed income investing takes soundings from over 150 CIO's and asset owners managing the fixed income element of portfolios worth in excess of US $20 trillion.

Fixed Income: The need to safely restart growth (Franklin Templeton blog, May 2020)

For compliance reasons, this paper is only accessible in certain geographies

Franklin Templeton updates its macroeconomic and sector views in the light of the COVID-19 pandemic.

Are Secure Income Assets Being Overlooked? (LGIM, May 2020)

For compliance reasons, this paper is NOT accessible in the United States and Canada

LGIM argues that the headlines garnered by the volatility and lack of liquidity in public markets may have left opportunities go unnoticed in private credit markets.

Fixed Income Outlook Q2: Recalibrating the rulebook (Federated Hermes, May 2020)

For compliance reasons, this paper is only accessible in certain geographies

Head of Fixed Income, 'Jacko' Jackson, and his team of specialists at Federated Hermes suggest the areas of the market to consider.

Resilience in Emerging Markets Debt (MFS blog, Jun 2020)

Recent volatility in emerging market debt appears to be at odds with historical experience in prior crises, suggests Matt Ryan and Katrina Urzun at MFS.

Know What You Don’t Know: Six tips from Howard Marks (Enterprising Investor blog, 2020)

John Authers interviews hedge fund guru Howard Marks, of Oaktree Capital, about his methodology, gained over decades, for investing in high-yield fixed income markets.

Fixed Income Asset Allocation Insights: EM's offer value (PineBridge Investments, May 2020)

In this article by PineBridge, although cautious, the authors suggest that opportunities may exist in the debt of emerging markets.

Video: Credit markets, government bonds and inflation (Janus Henderson, May 2020)

For compliance reasons, this paper is only accessible in the United States and Canada

In this video, Jenna Barnard, Co-Head of Strategic Fixed Income Head at Janus Henderson offers her insights into government bonds, inflation and credit markets.

Focus on Italy: Macroeconomic and fixed income scenario (Amundi, 2020)

For compliance reasons, this paper is NOT accessible in the United States

Amundi highlights two potential recovery scenarios for the Italian economy, neither of which are as optimistic as the Italian government's!

Emerging Market Fixed Income: Characteristics of the asset class (FTSE Russell blog, May 2020)

FTSE Russell explores the development of the emerging market fixed income class since the 1980's.

Looking to Benefit From Global IT Demand and Chinese Fixed Investments (NN IP blog, May 2020)

NN IP provides some updates on their asset class-specific views, including emerging markets debt, as markets now seem to be complacent about COVID-19 risks and economic data that remains dismal.

Investment Opportunities in Private Commercial Mortgages (MetLife IM, 2019)

MetLife IM examines the opportunity set that exists for investors in US private commercial mortgages, arguing that investors should consider allocating more to the sector.

Spending in Retirement: How you just might find what you want and what you need (PGIM Defined Contribution, 2020)

In this paper from PGIM Fixed Income, they outline strategies that can cope with the challenges of portfolio decumulation and providing a sustainable income through retirement.

Video: Exploring South Africa’s fixed income indices (S&P Dow Jones Indices, Jun 2020)

In this short video, S&P specialist Zack Bezuidenhoud tackles the South African fixed interest market, looking at the range of indices available, recent market drivers and index performance.

Webinar: What's different about Canadian MBS? (FTSE Russell, Jun 2020)

This webinar from FTSE Russell investigates the Canadian MBS market, noting increasing investor interest and updates aimed at providing additional liquidity.

ETFs in Insurance General Accounts (S&P Dow Jones Indices, 2020)

As part of its comprehensive report about the use of ETFs in insurance funds, S&P DJI devotes a section of its paper to examining the growth in the use of Fixed Income ETFs over the last five years,

Credit Spreads, Rating Downgrades, and Downside Performance: A market-informed approach to monitoring credit risk (2020)

This academic paper suggests that credit spreads, relative to those of peers, potentially contain actionable information about future bond performance and credit migration, thereby aiding credit risk monitoring efforts.

 
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