Fixed Income

Rethinking the role of investment grade corporates

The fixed income 40% – is now the time for investment grade corporates to take over from sovereign bonds? Senior Portfolio Manager Fatima Luis makes the case for an allocation switch-up.

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Fixed Income

EM debt: Why it’s time to de-diversify

EM debt investors have a new mantra: Avoid diversification. Following an indiscriminate sell-off, laser-focused, high-quality allocations are the name of the game for EM debt. Sector expert Daniel Moreno shares where he’s seeing investment potential.

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Fixed Income

If the UK were a high yield bond, how would it rank?

“When we analyse high yield credits, one of the first questions we ask ourselves is: are management interests aligned with bondholders, or shareholders?” Al Cattermole outlines how to find investment potential in an uncertain environment.

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Fixed Income

Positioning for the turning point

Where to position in a directionless market? Head of Fixed Income, Andrew Lake shares where he sees opportunities across the USD30 trillion bond universe.

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Views and Analysis

Fixed income is looking cheap – but where to buy? View from the fixed income desk

I have tried to time the news and wait to write my next update, but as there is something of significance happening almost every day, it is becoming the “update that is never going to happen”.

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Views and Analysis

WAR, WHAT IS IT GOOD FOR? VIEW FROM THE FIXED INCOME DESK

Not much good comes out of war, and for market participants it is another 2022 headwind to deal with. War is inflationary. We have seen the effects of the Ukraine/Russia conflict since it began in late February.

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Views and Analysis

Who's afraid of Big Bad Inflation? View from the Fixed Income Desk.

From recent market moves it would seem that the market has downgraded inflation from Big Bad Wolf, to Little Red Riding Hood. It has been an amazing few days post the 75bps move by the Federal Reserve last week. One comment from Fed Chair Jerome Powell – and we will come onto that in a second – and financial conditions have eased, all markets have rallied in tandem and have begun to price in a slowdown in both growth and inflation followed by an interest rate cut in short order. In keeping with the fairy tale theme, this would be the Goldilocks scenario…We have the Fed pivot, I hear you cry!

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Fixed Income

The Tectonic Tussle. View from the Fixed Income Desk.

The tectonic tussle for supremacy in investors’ psyche continues apace. It seems almost every week we race from the doom and gloom of recessionary fears, to the doom and gloom of inflation. Treasury bond volatility has increased as we race from one extreme to another.

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Views and Analysis

A HURRICANE OR A STORM IN A TEACUP? VIEW FROM THE FIXED INCOME DESK.

Friday’s Consumer Price Index (CPI) number was unexpectedly strong and caused markets to fall dramatically as inflation (and stagflation) fears moved once again to the front of investors’ minds. In addition, the European Central Bank (ECB) has finally joined the hawkish club, which re-priced European bonds dramatically this week. Subsequent pronouncements of a 25bps hike in July seem to put the ECB behind the curve and Bunds have sold off in response.

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Views and Analysis

IN A RANGE, WHICH WAY DO WE GO?

Time for my latest missive, and yes you guessed it, more debate around inflation, interest rates and recession. Treasuries have rallied, with risk selling off over the last week or so, but at least for Fixed Income, we seem to be stuck in a bit of a range as we wait for more data on growth and inflation. It looks like the ECB is now going to raise rates, and we are still expecting 2x50bps from the Federal Reserve over the next 2 meetings.

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Views and Analysis

All eyes on recession risks

On a recent trip into London, shops continue to be busy and a visit to the Nike store on Oxford Street was a nightmare, given it was so full the staff couldn’t cope. This seems to fly in the face of the dire warnings of a consumer having to decide between food and heat.

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Views and Analysis

Coordinated demand destruction

Today, we’ll be focused predominantly on inflation and the central banks’ reaction function. First, let’s not forget that the COVID response resulted in huge debt burdens for most countries. This will be an important part of the discussion by central banks given the consequences for balance sheet financing of a too aggressive approach to fighting inflation. 

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Views and Analysis

What’s up with inflation and are we entering a new fixed income mini cycle

We entered 2022 expecting some headwinds around inflation, a few interest rate rises in the US, and slowly easing supply chain blockages. And COVID would be a distant memory….or at least endemic. I often sit here as an apologist for Fixed Income (it is my job after all!) given the low and/or negative yields on offer, but despite the headwinds of inflation and slowing economic activity, I believe we are beginning to see the resurgence of the next Fixed Income mini cycle. Whether it is duration or credit is too early to tell at this point.

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Views and Analysis

Do markets face an autumn surprise?

Mirabaud Asset Management’s Head of Fixed Income Andrew Lake gives his review of the situation as we head into the fourth quarter

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Views and Analysis

As the IPCC publishes gloomy report, this is the route to net zero

Rain in London in August, wildfires in Greece and Italy, floods in Bangladesh: can anyone still really deny that global warming is at a crisis point? The role of human influence on the climate system is undisputed. That’s the stark message from the IPCC report on climate change published earlier this week.

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Views and Analysis

EasyJet: a Global Climate Bond framework case study

Examining how Mirabaud Asset Management’s Climate Bond team evaluates bond issuers’ climate policies

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Views and Analysis

The Global Climate Bond Framework - Case Study

The Global Climate Bond team use a framework to identify those issuers that have clear goals in reducing their greenhouse gas emissions in line with the targets set out in the Paris Agreement. Our focus is to seek issuers that can make significant reductions to the emissions they produce, which means we invest in some of the higher-emitting sectors. Engagement then becomes key.

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Views and Analysis

What’s happening with US Treasuries?

Andrew Lake, Head of Fixed Income, focuses on the moves in the US Treasury market

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Views and Analysis

Halfway Point 2021, it is a good time to take stock

We have reached the halfway point of 2021, and it is a good time to take stock of where we are and where we might be going. As the recently departed Donald Rumsfeld said “there are known unknowns and also unknown unknowns”.

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Views and Analysis

Mirabaud Convertible Bonds Europe Fund has a fully integrated ESG approach

The Mirabaud Convertible Bonds Europe Fund has a fully integrated ESG approach as part of its process. It has recently been awarded the SRI label by the French Ministry of Finance. Despite some recent headwinds, especially in areas like the ‘stay at home’ names, a number of positive factors still remain to make the European Convertibles asset class an opportunity for investors seeking to diversify risk.

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Contributors

Author

Andrew Lake

Head of Global Fixed Income, with 25 years’ experience in navigating fixed income markets

Author

Fatima Luis

Senior portfolio manager with over 25 years of experience in fixed income, including high yield and strategic bond strategies

Author

Daniel Moreno

Head of Emerging Market Debt, with over 21 years’ experience in this asset class and a specialist in managing blended Emerging Market Debt strategies

Author

Puneet Singh

Senior portfolio manager, with over 14 years’ experience in financial markets and a specialist in Emerging Market Debt