Latest

Perspectives

The global investment landscape is constantly evolving. We believe you need to have strong convictions in order to make insightful investment decisions in a rapidly changing world. Our deep investment research informs all stages of our investment processes and helps us navigate the global credit markets for our clients.

Please check out our latest thoughts and insights below.

June 2021

A Holding Pattern Until Incoming Data Helps Us Answer Some Big Questions
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May 2021

Talking Talking Taper
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April 2021

AS Vaccines Become Abundant in the US, Supply Will Start to Rotate
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March 2021

The Looming Transition to Vaccine Abundance for the Developed World
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February 2021

Economies Have Room to Grow, Perhaps More Than Some Think
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January 2021

Inflation Outlook: Reading through Noise for the Signal
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November 2020

Safe Harbor on the Horizon, But a Storm May Be Rolling In
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October 2020

Is It All Ok? We’ll Know a Lot More Soon
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September 2020

Zone of No Action: The Federal Reserve’s Move to Create Policy Space
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August 2020

Progress is in Motion, Sideways Until Better Growth in 2021
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July 2020

Behavioral Adaption Becomes an Important Modulator as Coronavirus Hotspots Shift Globally
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June 2020

What History Tells Us About Market Recoveries
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February 2020

Coronavirus Impact Across Asset Classes: Will Uncertainties Mask the Differential?
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January 20, 2021

2021 Emerging Markets Debt Outlook

September 1, 2020

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Emerging Insights:
Good Yield Hunting

The hunt for yield is accelerating given the exceptionally low nominal and real yields in developed market (DM) bonds.

Executive Summary

  • The Pete Seeger song that became a hit during the 1960s in a cover version by The Byrds may seem to have little relevance to the world of debt investment, but when it comes to the management of Multi-Asset Credit (MAC) portfolios, the underlying message holds true – there is a time to be in each asset class and a time to leave.
  • Single or multi-sector investment strategies with fixed allocations preclude investors from seeking to take advantage of over or under valuations of various asset classes in the investment universe. In contrast, managers with MAC mandates have the ability to rotate between asset classes as their views on relative attractiveness change. This gives investors the ability to gain exposure to an expansive universe of fixed income opportunities, as well as the ability to reduce duration.
  • To manage MAC strategies effectively, there are three key factors that managers should consider: firstly, the differing valuations and prospective return opportunities; secondly, the likely future behaviour of each asset class; and thirdly, the extent of the dispersion of returns between the best and worst performing sectors in each asset class.
  • In the current environment of historically low yields, MAC strategies may also afford protection against rising bond yields either through short duration instruments or more often, using derivative based hedges, which have been far more efficient from a transaction cost perspective, in our experience.
  • Understanding the key factors that drive the relative attractiveness of each credit asset class within the MAC universe is critical to achieving the results that investors are looking for as they take advantage of a global credit opportunity set.
  • This paper examines the key issues that govern the construction and management of MAC portfolios and how managers can decide when it may be a time to plant and when a time to reap.

Valuations, Cross-Sectional Dispersions, and Asset Class Behaviour Guide MAC Portfolio Construction

Many debt investors focus on higher yields to achieve their return targets; but with higher yields come higher risks both at the security level and also at the sector and asset class level. Indiscriminate investor demand can also push valuations on specific asset classes away from what fundamental considerations would imply. Being locked into any specific higher yielding asset class, such as US high yield or emerging market local currency sovereign debt through fixed asset allocations reduces the manager’s ability to capture the upside return potential of other asset classes as their relative attractiveness changes. In contrast, MAC managers with the ability to recalibrate or eliminate exposures to specific asset classes are able to seek to take advantage of the time to sow – when asset class valuations, dispersions, and future likely behaviour are attractive to them, and the time to reap – when they determine valuations may have moved to excessive levels.

November 1, 2019

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Emerging Markets Debt:
Hello Again

While likely not new to many institutional investors, EMD may still be a misunderstood asset class.

Executive Summary

  • The Pete Seeger song that became a hit during the 1960s in a cover version by The Byrds may seem to have little relevance to the world of debt investment, but when it comes to the management of Multi-Asset Credit (MAC) portfolios, the underlying message holds true – there is a time to be in each asset class and a time to leave.
  • Single or multi-sector investment strategies with fixed allocations preclude investors from seeking to take advantage of over or under valuations of various asset classes in the investment universe. In contrast, managers with MAC mandates have the ability to rotate between asset classes as their views on relative attractiveness change. This gives investors the ability to gain exposure to an expansive universe of fixed income opportunities, as well as the ability to reduce duration.
  • To manage MAC strategies effectively, there are three key factors that managers should consider: firstly, the differing valuations and prospective return opportunities; secondly, the likely future behaviour of each asset class; and thirdly, the extent of the dispersion of returns between the best and worst performing sectors in each asset class.
  • In the current environment of historically low yields, MAC strategies may also afford protection against rising bond yields either through short duration instruments or more often, using derivative based hedges, which have been far more efficient from a transaction cost perspective, in our experience.
  • Understanding the key factors that drive the relative attractiveness of each credit asset class within the MAC universe is critical to achieving the results that investors are looking for as they take advantage of a global credit opportunity set.
  • This paper examines the key issues that govern the construction and management of MAC portfolios and how managers can decide when it may be a time to plant and when a time to reap.

Valuations, Cross-Sectional Dispersions, and Asset Class Behaviour Guide MAC Portfolio Construction

Many debt investors focus on higher yields to achieve their return targets; but with higher yields come higher risks both at the security level and also at the sector and asset class level. Indiscriminate investor demand can also push valuations on specific asset classes away from what fundamental considerations would imply. Being locked into any specific higher yielding asset class, such as US high yield or emerging market local currency sovereign debt through fixed asset allocations reduces the manager’s ability to capture the upside return potential of other asset classes as their relative attractiveness changes. In contrast, MAC managers with the ability to recalibrate or eliminate exposures to specific asset classes are able to seek to take advantage of the time to sow – when asset class valuations, dispersions, and future likely behaviour are attractive to them, and the time to reap – when they determine valuations may have moved to excessive levels.

April 1, 2019

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Multi-Asset Credit:
To Everything There is a Season

To manage MAC strategies effectively, there are three key factors that managers should consider.

Executive Summary

  • The Pete Seeger song that became a hit during the 1960s in a cover version by The Byrds may seem to have little relevance to the world of debt investment, but when it comes to the management of Multi-Asset Credit (MAC) portfolios, the underlying message holds true – there is a time to be in each asset class and a time to leave.
  • Single or multi-sector investment strategies with fixed allocations preclude investors from seeking to take advantage of over or under valuations of various asset classes in the investment universe. In contrast, managers with MAC mandates have the ability to rotate between asset classes as their views on relative attractiveness change. This gives investors the ability to gain exposure to an expansive universe of fixed income opportunities, as well as the ability to reduce duration.
  • To manage MAC strategies effectively, there are three key factors that managers should consider: firstly, the differing valuations and prospective return opportunities; secondly, the likely future behaviour of each asset class; and thirdly, the extent of the dispersion of returns between the best and worst performing sectors in each asset class.
  • In the current environment of historically low yields, MAC strategies may also afford protection against rising bond yields either through short duration instruments or more often, using derivative based hedges, which have been far more efficient from a transaction cost perspective, in our experience.
  • Understanding the key factors that drive the relative attractiveness of each credit asset class within the MAC universe is critical to achieving the results that investors are looking for as they take advantage of a global credit opportunity set.
  • This paper examines the key issues that govern the construction and management of MAC portfolios and how managers can decide when it may be a time to plant and when a time to reap.

Valuations, Cross-Sectional Dispersions, and Asset Class Behaviour Guide MAC Portfolio Construction

Many debt investors focus on higher yields to achieve their return targets; but with higher yields come higher risks both at the security level and also at the sector and asset class level. Indiscriminate investor demand can also push valuations on specific asset classes away from what fundamental considerations would imply. Being locked into any specific higher yielding asset class, such as US high yield or emerging market local currency sovereign debt through fixed asset allocations reduces the manager’s ability to capture the upside return potential of other asset classes as their relative attractiveness changes. In contrast, MAC managers with the ability to recalibrate or eliminate exposures to specific asset classes are able to seek to take advantage of the time to sow – when asset class valuations, dispersions, and future likely behaviour are attractive to them, and the time to reap – when they determine valuations may have moved to excessive levels.

December 1, 2018

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Emerging Markets Update:
Ecuador Trip Notes

As part of our investment process, we travel to portfolio countries to assess current developments and investment opportunities.

Executive Summary

  • The Pete Seeger song that became a hit during the 1960s in a cover version by The Byrds may seem to have little relevance to the world of debt investment, but when it comes to the management of Multi-Asset Credit (MAC) portfolios, the underlying message holds true – there is a time to be in each asset class and a time to leave.
  • Single or multi-sector investment strategies with fixed allocations preclude investors from seeking to take advantage of over or under valuations of various asset classes in the investment universe. In contrast, managers with MAC mandates have the ability to rotate between asset classes as their views on relative attractiveness change. This gives investors the ability to gain exposure to an expansive universe of fixed income opportunities, as well as the ability to reduce duration.
  • To manage MAC strategies effectively, there are three key factors that managers should consider: firstly, the differing valuations and prospective return opportunities; secondly, the likely future behaviour of each asset class; and thirdly, the extent of the dispersion of returns between the best and worst performing sectors in each asset class.
  • In the current environment of historically low yields, MAC strategies may also afford protection against rising bond yields either through short duration instruments or more often, using derivative based hedges, which have been far more efficient from a transaction cost perspective, in our experience.
  • Understanding the key factors that drive the relative attractiveness of each credit asset class within the MAC universe is critical to achieving the results that investors are looking for as they take advantage of a global credit opportunity set.
  • This paper examines the key issues that govern the construction and management of MAC portfolios and how managers can decide when it may be a time to plant and when a time to reap.

Valuations, Cross-Sectional Dispersions, and Asset Class Behaviour Guide MAC Portfolio Construction

Many debt investors focus on higher yields to achieve their return targets; but with higher yields come higher risks both at the security level and also at the sector and asset class level. Indiscriminate investor demand can also push valuations on specific asset classes away from what fundamental considerations would imply. Being locked into any specific higher yielding asset class, such as US high yield or emerging market local currency sovereign debt through fixed asset allocations reduces the manager’s ability to capture the upside return potential of other asset classes as their relative attractiveness changes. In contrast, MAC managers with the ability to recalibrate or eliminate exposures to specific asset classes are able to seek to take advantage of the time to sow – when asset class valuations, dispersions, and future likely behaviour are attractive to them, and the time to reap – when they determine valuations may have moved to excessive levels.

December 1, 2018

×

Emerging Markets Update:
Argentina Trip Notes

As part of our investment process, we travel to portfolio countries to assess current developments and investment opportunities.

Executive Summary

  • The Pete Seeger song that became a hit during the 1960s in a cover version by The Byrds may seem to have little relevance to the world of debt investment, but when it comes to the management of Multi-Asset Credit (MAC) portfolios, the underlying message holds true – there is a time to be in each asset class and a time to leave.
  • Single or multi-sector investment strategies with fixed allocations preclude investors from seeking to take advantage of over or under valuations of various asset classes in the investment universe. In contrast, managers with MAC mandates have the ability to rotate between asset classes as their views on relative attractiveness change. This gives investors the ability to gain exposure to an expansive universe of fixed income opportunities, as well as the ability to reduce duration.
  • To manage MAC strategies effectively, there are three key factors that managers should consider: firstly, the differing valuations and prospective return opportunities; secondly, the likely future behaviour of each asset class; and thirdly, the extent of the dispersion of returns between the best and worst performing sectors in each asset class.
  • In the current environment of historically low yields, MAC strategies may also afford protection against rising bond yields either through short duration instruments or more often, using derivative based hedges, which have been far more efficient from a transaction cost perspective, in our experience.
  • Understanding the key factors that drive the relative attractiveness of each credit asset class within the MAC universe is critical to achieving the results that investors are looking for as they take advantage of a global credit opportunity set.
  • This paper examines the key issues that govern the construction and management of MAC portfolios and how managers can decide when it may be a time to plant and when a time to reap.

Valuations, Cross-Sectional Dispersions, and Asset Class Behaviour Guide MAC Portfolio Construction

Many debt investors focus on higher yields to achieve their return targets; but with higher yields come higher risks both at the security level and also at the sector and asset class level. Indiscriminate investor demand can also push valuations on specific asset classes away from what fundamental considerations would imply. Being locked into any specific higher yielding asset class, such as US high yield or emerging market local currency sovereign debt through fixed asset allocations reduces the manager’s ability to capture the upside return potential of other asset classes as their relative attractiveness changes. In contrast, MAC managers with the ability to recalibrate or eliminate exposures to specific asset classes are able to seek to take advantage of the time to sow – when asset class valuations, dispersions, and future likely behaviour are attractive to them, and the time to reap – when they determine valuations may have moved to excessive levels.

September 1, 2018

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Emerging Markets Update:
Signs of Overshooting

In our most recent white paper, we argue that emerging markets’ (“EM”) fundamentals remain strong.

Executive Summary

  • The Pete Seeger song that became a hit during the 1960s in a cover version by The Byrds may seem to have little relevance to the world of debt investment, but when it comes to the management of Multi-Asset Credit (MAC) portfolios, the underlying message holds true – there is a time to be in each asset class and a time to leave.
  • Single or multi-sector investment strategies with fixed allocations preclude investors from seeking to take advantage of over or under valuations of various asset classes in the investment universe. In contrast, managers with MAC mandates have the ability to rotate between asset classes as their views on relative attractiveness change. This gives investors the ability to gain exposure to an expansive universe of fixed income opportunities, as well as the ability to reduce duration.
  • To manage MAC strategies effectively, there are three key factors that managers should consider: firstly, the differing valuations and prospective return opportunities; secondly, the likely future behaviour of each asset class; and thirdly, the extent of the dispersion of returns between the best and worst performing sectors in each asset class.
  • In the current environment of historically low yields, MAC strategies may also afford protection against rising bond yields either through short duration instruments or more often, using derivative based hedges, which have been far more efficient from a transaction cost perspective, in our experience.
  • Understanding the key factors that drive the relative attractiveness of each credit asset class within the MAC universe is critical to achieving the results that investors are looking for as they take advantage of a global credit opportunity set.
  • This paper examines the key issues that govern the construction and management of MAC portfolios and how managers can decide when it may be a time to plant and when a time to reap.

Valuations, Cross-Sectional Dispersions, and Asset Class Behaviour Guide MAC Portfolio Construction

Many debt investors focus on higher yields to achieve their return targets; but with higher yields come higher risks both at the security level and also at the sector and asset class level. Indiscriminate investor demand can also push valuations on specific asset classes away from what fundamental considerations would imply. Being locked into any specific higher yielding asset class, such as US high yield or emerging market local currency sovereign debt through fixed asset allocations reduces the manager’s ability to capture the upside return potential of other asset classes as their relative attractiveness changes. In contrast, MAC managers with the ability to recalibrate or eliminate exposures to specific asset classes are able to seek to take advantage of the time to sow – when asset class valuations, dispersions, and future likely behaviour are attractive to them, and the time to reap – when they determine valuations may have moved to excessive levels.

June 1, 2018

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Why Now Is a Good Time to Invest in Emerging Markets Debt

Following strong performance across EMD markets in 2016 and 2017 and a good start to 2018, market sentiment has turned negative more recently.

Executive Summary

  • The Pete Seeger song that became a hit during the 1960s in a cover version by The Byrds may seem to have little relevance to the world of debt investment, but when it comes to the management of Multi-Asset Credit (MAC) portfolios, the underlying message holds true – there is a time to be in each asset class and a time to leave.
  • Single or multi-sector investment strategies with fixed allocations preclude investors from seeking to take advantage of over or under valuations of various asset classes in the investment universe. In contrast, managers with MAC mandates have the ability to rotate between asset classes as their views on relative attractiveness change. This gives investors the ability to gain exposure to an expansive universe of fixed income opportunities, as well as the ability to reduce duration.
  • To manage MAC strategies effectively, there are three key factors that managers should consider: firstly, the differing valuations and prospective return opportunities; secondly, the likely future behaviour of each asset class; and thirdly, the extent of the dispersion of returns between the best and worst performing sectors in each asset class.
  • In the current environment of historically low yields, MAC strategies may also afford protection against rising bond yields either through short duration instruments or more often, using derivative based hedges, which have been far more efficient from a transaction cost perspective, in our experience.
  • Understanding the key factors that drive the relative attractiveness of each credit asset class within the MAC universe is critical to achieving the results that investors are looking for as they take advantage of a global credit opportunity set.
  • This paper examines the key issues that govern the construction and management of MAC portfolios and how managers can decide when it may be a time to plant and when a time to reap.

Valuations, Cross-Sectional Dispersions, and Asset Class Behaviour Guide MAC Portfolio Construction

Many debt investors focus on higher yields to achieve their return targets; but with higher yields come higher risks both at the security level and also at the sector and asset class level. Indiscriminate investor demand can also push valuations on specific asset classes away from what fundamental considerations would imply. Being locked into any specific higher yielding asset class, such as US high yield or emerging market local currency sovereign debt through fixed asset allocations reduces the manager’s ability to capture the upside return potential of other asset classes as their relative attractiveness changes. In contrast, MAC managers with the ability to recalibrate or eliminate exposures to specific asset classes are able to seek to take advantage of the time to sow – when asset class valuations, dispersions, and future likely behaviour are attractive to them, and the time to reap – when they determine valuations may have moved to excessive levels.