Monthly Archives:

November 2017

Low yield, low quality, weaker covenants

When investing in companies of a lower credit quality, loss given default risk is the key threat that investors have to assess. Consequently, covenant protection is a crucial consideration before lending capital to a company. We wrote about covenant protection back in 2014 and it’s fair to say that covenant quality in the high yield market hasn’t improved much since then; actually quite the opp…

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BVTV: Listed infrastructure – how would the asset class respond to higher interest rates and inflation?

A number of asset classes, including listed infrastructure assets, have benefited from the global search for yield that has taken place following a collapse in short and long-term government bond yields. But what if the positive tailwinds of low interest rates and inflation start to reverse? Whilst the current consensus is that monetary policy stimulus will be removed at a very gradual pace, it…

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En route to Kilkenomics: a Bond Vigilantes and Episode Blog brainstorming video

I made what is turning into an annual pilgrimage to the brilliant Kilkenomics festival in Kilkenny, Ireland, last weekend, this time along with Eric Lonergan and Tristan Hanson from M&G’s multi-asset fund management team.

En route, we met some clients in Dublin and then took the opportunity to set the world to rights over a pint or two in legendary pub Kehoes. In these three short videos, we sh…

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BVTV: deciphering the differences between green bonds, impact investing and ESG

Richard Sherry, fund manager in M&G’s institutional fixed income team responsible for impact investing, joined me for this week’s edition of BVTV to talk through an area of the market that has been rapidly gaining attention. Richard unpicks the terminology to explain the differences between the various approaches and offers his view of how the market will likely develop – and what this will mea…

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US yield curve flattening: nothing to see here

Guest contributor – Tristan Hanson (Fund Manager, M&G Multi-Asset Team)

The following blog was first posted on M&G’s Multi-Asset Team Blog, www.episodeblog.com. M&G’s Equities Team also regularly post their views at www.equitiesforum.com.

The flattening of the US yield curve has inspired much commentary and hand-wringing in certain quarters lately. The concern is overdone.

Looking back at perio…

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One year, one hundred climbs. Thanks everyone. CASCAID is well on its way to raising £2 million for Cancer Research UK.

I did it! On 12th November I rode up the 100th and final hill of my challenge, Cheddar Gorge in Somerset.

 

The UK asset management industry has now raised nearly £2 million over the course of this year through CASCAID.  All this money will be going directly to Cancer Research UK.  The target was £1 million, so a huge thanks to all those who have donated to the huge variety of different events…

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Beware the death of Libor

Guest contributor – David Covey (Financial Institutions Analyst, M&G Fixed Income Team)

The end is coming for the London interbank offered rate (Libor).  Ten years after suspicions emerged that this key interest rate was being manipulated in the financial crisis, regulators are ramping up their efforts to replace the benchmark rates. The Bank of England (BoE) and US Federal Reserve are leading …

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BVTV: Middle Eastern tensions and rising oil

Saudi Arabia, Yemen, Lebanon. The political risk spotlight has swung largely away from North Korea in recent days – despite President Trump’s visit to the region – and towards the Middle East. Fears of a wider regional confrontation have grown after an anti-corruption drive by Saudi Arabia’s young heir apparent, the firing of a missile from Yemen at Riyadh that the Saudis have blamed on Iran an…

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In a QE adjusted world, bond indices look very different

Investing in public securities, whether equity or debt, is driven by two primary desires; firstly a need to save for the future, and secondly the requirement to see these savings grow. This results in a need for investors to pursue low risk and high growth investments.  In order to understand these risks, assets get categorised based on their potential and historic risk characteristics. Broadly…

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BVTV: What a week that was. Powell, US tax reforms, and BoE hike

There was no shortage of topics up for consideration for today’s BVTV: Jerome Powell’s nomination as next Fed chair, further clarity around President Trump’s much touted US tax reform plans, and the UK’s first interest rate rise for 10 years.

With Powell’s nomination very much perceived as preserving the US monetary policy status quo, it’s the latter two developments that I have focused on this…

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