The recovery has been based on central bank expectations. It’s not healthy.

Bonds have performed well this year, driven by the decline in underlying government yields. The recovery in risk assets since mid-February has run out of some momentum even if the fears of an immediate recession have lessened. Actually, the macro outlook hasn’t changed that much and I still see some value in high yield and […]

8 April 2016 by Chris Iggo

Investment Insight

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We are experiencing post shock investment return trauma

The global economy and the financial markets are still reacting to the shocks of China and oil. Lower oil prices seem to help more of the economy than they harm. Stable oil prices should improve sentiment. China’s policy makers appear committed to stabilising growth expectations. We could now be in a period of post-shock adjustment. […]

4 March 2016 by Chris Iggo

Bonds Uncategorized

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Rates are staying lower for longer, credit oversold, inflation is under-priced. A 6% bond fund return is possible

It’s time to stop worrying about things you can’t control. As an investor that means building a portfolio that you are comfortable with, you understand the risks of and have some view that will either be rewarded by performance or not. In fixed income markets there is yield available and it should be sought. Yield […]

22 February 2016 by Chris Iggo

Bonds

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Some interest rates may be negative but yields have widened

Rates down, spreads up –  Negative interest rates and a risk averse flight to safety have pushed core government bond yields back towards their all-time lows. In fact, for maturities up to 5-years, new lows were reached this week in the German and Japanese bond markets. But in the world of credit it is different. Yield […]

14 February 2016 by Chris Iggo

Uncategorized

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Perhaps valuations have moved in line with fundamentals

Another week of falling markets and oil prices. But there were some signs of stability towards Friday. Perhaps valuations have moved enough to be more in line with economic fundamentals. Quantitative easing (QE) inflated financial markets, but didn’t inflate economies by anywhere nearly enough to justify high equity prices and thin credit spreads. Now that […]

24 January 2016 by Chris Iggo

Valuations

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Chaos in the markets and bright lights in the world of the arts going out. Don’t you just love January?

Volatility has certainly increased and with it the range of expectations about how the world economy will evolve this year has expanded. Some call for recession and financial crisis, others say it’s not so bad and the Federal Reserve (Fed) will stick with its rate normalisation programme. One thing is for sure, financial assets are, […]

17 January 2016 by Chris Iggo

Uncategorized

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The era of zero US rates is over. Eventually markets will once again determine the price of capital

US rates are up by a staggeringly small 25 basis points (bps). There is more to come. Economists will try to outdo each other on the number and the timing, but the big message is that the era of zero US rates is over. It might be too early to say that the era of […]

23 December 2015 by Chris Iggo

News

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The outlook for bond markets as we near year’s end

The last few weeks have been hectic with travel and other things but I have finally found some time to sit down and compose my thoughts on the outlook for markets as we get towards the end of the year. Returns to bond indices have been modest in 2015 despite central banks having either eased […]

13 November 2015 by Chris Iggo

News

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The aggregate total return from the US high yield market is on track to be the worst since 2008

They key to delivering steady returns with a focus on capital preservation is the holy grail of investment management, particularly in fixed income. The key drivers of return are interest rate and credit risk. These two risks can be and often are negatively correlated. As such, active asset allocation, driven by an understanding of the […]

10 October 2015 by Chris Iggo

News

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The US is strong, Europe improving, yet sentiment has collapsed

The data still tells us that the US economy is strong and that Europe is on a firming trend. Yet sentiment has collapsed. We hear talk of global recession and rising defaults. The bond market is seeing wider bid-offer spreads and poor liquidity. It is true there has been a demand and terms of trade […]

25 September 2015 by Chris Iggo

News

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