Fixed Income and Treasury - Articles & White Papers
White papers and reports on fixed income portfolio management and treasury management, examining issues related to the management of bond portfolios (from cash management through to longer-dated fixed income portfolio management). The most common fixed income research in this section covers specific elements of fixed income investing such as managing cash investment portfolios, unconstrained fixed income investing, absolute return fixed income investing or fixed income overlay strategies. Other interesting topics within this section include fixed income attribution, responsible investment for fixed income investors, and factor models / smart beta approaches to fixed income portfolio management. Other popular articles and papers assess the valuation of fixed income securities, the expected returns from bonds, and the valuation of UK index-linked gilts and TIPS. Other popular papers cover bond ETFs, integrating ESG into fixed income, and issues surrounding negative yields. Unsurprisingly, a salary survey which details the salaries of fixed income fund managers has also proved popular.
Sentiment among professional investors seems to have reached new lows, and truly, there are enough reasons investors can think of to justify a bearish view on financial markets. We can see the disintegration of the European economy (Brexit, the rise of populist parties, Italian banks), a Chinese hard landing (unsuccessful rebalancing of the Chinese economy, high debt), a rise in ...
This US salary survey, compiled jointly by Johnson Associates and Greenwich Associates, shows median salary and bonus earned by analysts, traders and portfolio managers, working in equity and fixed income, for traditional asset managers and at hedge funds. It suggests that compensation for professionals at traditional buy-side organizations has almost recovered to pre-crisis highs. ...
This edition of JP Morgan's Long-Term Capital Market Assumptions is written against a backdrop of low investment return expectations, slow global growth and unprecedented monetary policy decisions. The paper considers the long-term impact of the structural factors affecting economies today on a 10 - 15 year investment horizon.
Secured (or securitised) bonds still carry the stigma of the 2008 financial crisis. But stigma often spells opportunity, and the fixed income specialists at RLAM argue that this asset class offers great value for managers who are prepared to get to grips with the documentation underlying individual securities. Not everyone is prepared to do this research, and as a result secured ...
Investors are increasingly turning to indexed ETFs to pursue active objectives. Institutions are using ETFs to construct portfolios, fine-tune risk and improve operational tasks like cash management and portfolio transitions. Learn more in BlackRock’s ETF Desk Reference.
Topics include:
Trends in institutional ETF adoption across asset ...
Schroders Economics Group produces 30-year return forecasts, on an annual basis, for a range of asset classes. Here they outline the methodology used, which is based on a series of building blocks and estimates of risk premia, and surmise the key conclusions from our analysis. For the first time, this year they are also publishing a wider range of country-specific returns for ...
This Credit Suisse paper looks at the transformative changes central banks in advanced economies have undergone since 2008. The report concludes that the key issue for decision-makers globally remains to consider which fundamental direction monetary policy ought to take next, assessing two alternative scenarios that may evolve: a return to a pre-crisis "normal", or fiscal dominance.
U.S. estimates of the natural rate of interest – the real short-term interest rate that would prevail absent transitory disturbances – have declined dramatically since the start of the global financial crisis. The authors of this paper find that large declines in GDP trend growth and natural rates of interest have occurred over the past 25 years in the four economies ...
Austerity and deleveraging are gradually ending. As central banks lengthen their periods of accommodation, they are also stepping increasingly into supporting roles as incremental policy support starts to arrive from the fiscal side. While the sizes of the upcoming fiscal thrusts and re-leveraging are not impressive, markets take note of changes in direction. Another important ...
The authors of this academic paper examine the behavior, determinants, and implications of the equilibrium level of the real federal funds rate, defined as the rate consistent with full employment and stable inflation in the medium term.
Many preferred securities offer yields of 5–6% or more, largely from investment-grade issuers, yet the complex and often misunderstood asset class is typically underutilized by institutional investors. We discuss how preferreds may improve income profiles and risk-adjusted returns within diversified portfolios due to their unique and complementary characteristics.
Here’s an asset class that continues to defy the odds. Despite concerns of high debt levels, growing geopolitical risks and sluggish global growth, emerging markets (EM) corporate debt has once again delivered another year of impressive results.
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Since the 2008 financial crisis, major central banks have purchased $9 trillion of bonds in efforts to reinvigorate the global economy. Government guaranteed securities comprise 96% of these purchases. Several central banks have purchased corporate bonds; the European Central Bank (ECB) is the largest buyer of these bonds and remains an active purchaser. With signs of rising ...
Fixed income investors may be stymied by the current mix of interest rate projections and global macroeconomic news. Interest rates remain near historical lows, and investors continue to move between risky assets and relative safe havens like Treasurys based on the latest market headlines. We believe that bank loans can be a compelling addition to fixed income portfolios in this ...
Although the US is embarking on a gradual path toward higher interest rates, low and even negative yields continue to proliferate across much of the developed world. As a result, fixed-income investors who normally stick close to home are searching far and wide to find ways of generating additional income in their portfolios.
Our view, outlined in The State of the Global Cash Markets, is that cash investing is entering a new era of increased resiliency and liquidity—propelled by US money fund reform, upcoming reforms in the EU and a new regulatory-friendly regime in Washington.
This 21-page paper by Voya Investment Management provides an overview of the firm's long-term capital markets forecast of asset class returns over the 2017-2026 horizon. It also discusses the firm's methodology of forecasting the covariance and correlations of returns.
While corporate plan sponsors are keenly aware of interest rate risk within their defined benefit plans, few fully appreciate the complex and significant risk posed by credit spreads.
Amid market uncertainty and record-low interest rates, private debt - an emerging asset class - addresses institutional investors’ desire for yield and lower volatility. This 15-page paper by TIAA discusses the opportunity for illiquid asset diversification.
