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Fixed Income - The Best White Papers from July-August 2018

  • Posted by: ,  Chief Executive
  • 22 August 2018
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Bond market investing - the best recent research papers 

How should investors navigate fixed income markets In an environment where rates are rising and pockets of value are less-than-obvious? Should fixed income investors broaden their horizons or are there opportunities lurking in plain sight?

Below we list some of the most interesting research from the last couple of months. Are all munis green? Are EU investors ready for money market reforms? What would a factor decomposition of bond returns look like? This selection of whitepapers attempts to answer these and other topical queries as we progress into the third quarter of 2018.

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Navigating Fixed Income Portfolios in a U.S. Rising Rate Environment (eVestment, Aug 2018)
eVestment analyzed the actions that U.S. public plans are taking to mitigate downside risk, given the current flatness of the U.S. yield curve and heightened anticipation of a rising rate environment.

Broadening the universe: The strategic case for alternative credit (LGIM, Aug 2018)
(For compliance reasons, this paper is not accessible in the US & Canada)
With falling credit spreads in high yield and EM debt, plus potential indicators of late-cycle behaviour in the U.S., should pension scheme investors be nervous about investing in alternative credit?

Global active bond fund returns: a factor decomposition (Vanguard, Jul 2018)
In this paper, Vanguard analyzes 15 types of global active bond funds to determine the extent to which their results arise from term, credit, currency, high yield, security selection, or market timing.

PGIM Fixed Income Q3 Market Outlook
(For compliance reasons, this paper is only accessible in the United States)
PGIM discusses short-term factors supporting the US dollar as well as the continued global expansion (despite existing trade-related concerns and EM volatility) and their implications for fixed income markets.

2018 Midyear Outlook Summary (Capital Group)
(For compliance reasons, this paper is only accessible in certain geographies)
With 2018 halfway over, the majority of countries could be said to be experiencing an economic upswing.  Yet trade-related issues, volatility, tighter monetary policy, and rich valuations may cause investors to wonder - 'What's next?'

The future of fixed income (Aviva Investors blog, 2018)
(For compliance reasons, this paper is only accessible in the UK & Switzerland)
Aviva discusses the ways in which shifting investor dynamics, alternative data sources, and advances in technology have affected fixed income markets.

Muni ESG investing: Are all muni bonds "green?" (Eaton Vance blog, Jun 2018)
Responsible Investing may be well suited to the municipal bond market, being that it is a market largely dedicated to serving the public good by financing necessary infrastructure needs and public improvements.

Global Unconstrained Fixed Income - addressing common concerns (Manulife AM, Jul 2018) 
(For compliance reasons, this paper is not accessible in the EMEA region)
As we move further into 2018, more central banks appear set to follow the US and begin the normalization phase of their monetary policies by tapering bond purchases, reducing balance sheets or raising short-term policy rates.

Three Reasons U.S. Investors Should Consider Global Loans (Barings, Jun 2018)
(For compliance reasons, this paper is only accessible in the United States)
European credit spread widening, given the fundamentals and the divergence between U.S. and European monetary policy, could present an opportunity for U.S. investors to gain exposure to European senior secured loans.

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