Fixed income commentary
Physical gilts have generally offered a yield pick-up over equivalent swap-based exposure. Yet this premium has declined over the past two years as pension funds have continued to invest heavily in gilts to match liabilities. Let's consider how much this premium might have to fall for investors to swap bonds for swaps.
Large investors like LGIM play an important role in financing housing associations. With their operating landscape continuing to evolve rapidly, and with the Grenfell Tower tragedy at the forefront of our minds, what are our expectations of the housing associations we invest in?
‘Tis the season for giving thanks, at least in the world’s largest economy. But after the market routs of the last month – driven by US stocks, no less – there is precious little to be grateful for in some commentators’ eyes. Enter duration, which has been helping to give the protection we all crave, so long as you’re long, that is…
Investors entering retirement may be tempted to look to higher-yielding assets to boost their income. But could this result in greater concentration risk? And might dividends be more stable than equity volatility implies?
Five months is a long time in Italian politics. Back in June, we observed that Italy was too big to fail, but also too big to bail. We were also waiting for the almost inevitable clash with the European Commission over the budget. That has now arrived and we have started trading Italian risk in the new higher range for spreads. * (Bubbling Tensions in Politics)
Americans go to the polls on 6 November in a vote widely seen as a referendum on Donald Trump, the most controversial US president in living memory. What could be the implications for high yield investors?
The American midterm elections are approaching and the crystal ball gazing has begun. Here’s what investors should consider regardless of whether the US votes for a ‘distilled Donald’, the ‘Democratic double’ or a ‘divided democracy’.
One-day corrections of 3% are always painful, especially so when investors have become so accustomed to low volatility after almost a decade-long bull market. We see the move as most likely a technical sell-off (famous last words) and believe it is probably too early to buy the dip.