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We believe individuals and teams are best placed to meet their potential by working collaboratively, particularly in today’s interlinked and fast-paced global financial markets.
The first quarter was extreme in the scale and magnitude of financial market volatility, particularly over the last six weeks of 1Q’20. A dramatic, global economic slowdown resulted from the unprecedented global quarantine of entire populations, in most developed countries, in response to the COV...
As COVID-19 wreaks havoc on lived and financial markets, we check in with our veteran High Yield Fixed Income team to learn which industries are being most affected, where there are opportunities and why High Yield may be considered 'cheap' right now.
The U.S. High Yield market, as represented by the ICE BofAML US High Yield Constrained Index (HUC0) posted a +2.6% Q4’19 total return (‘TR’), and a +14.4% total return for the full-year 2019. The strong 2019 represented the fourth best annual return since the post-GFC recovery in 2009; modestly t...
We recently travelled to Sub-Saharan Africa to undertake bottom-up research on a number of high yield sovereign credits, namely: Kenya, Zambia and Angola. Research trips, such as these, form a vital part of our investment process; particularly for countries where idiosyncrasies are the dominant d...
First State Investments’ High Yield team aims to achieve superior risk-adjusted returns with lower volatility than the high yield market.
Persistent trade-related uncertainty and unrest in Hong Kong clouded the outlook for Asian growth in 2019. Bond yields were under downward pressure for much of the year and, in turn, fixed income markets in the region performed well.
Investing in emerging markets debt and Asian fixed income offers the potential for strong returns, an attractive income stream and diversification benefits versus developed markets.
Global city populations continue to grow, driven by urbanisation. The provision of housing for growing populations is a major challenge for many countries and cities. Adequate housing is a factor that influences a city’s mobility of labour, social wellbeing and commerce levels. Government housing...
Our high yield team focuses on the diligent implementation of our disciplined investment process.
As it turns out, the first half of 2018 was challenging for many financial markets in general, and many fixed income markets in particular.
In general, global corporate bonds posted positive total returns during the third quarter of 2018.
In general, global corporate bonds posted positive total returns during the third quarter of 2018.
In general, global corporate bonds posted positive total returns during the third quarter of 2018.
In this Q2 2019 Quarterly Update we review the increasingly dovish attitudes adopted by central banks and the “whatever it takes” commitment to monetary stimulus, the general high yield market, our portfolio positioning and the top contributors and detractors from our five High Yield Fixed Income...
The U.S. High Yield market, as represented by the ICE BofAML US High Yield Constrained Index (HUC0) posted a +1.22% total return during Q3’19, on the heels of the particularly strong, +10.16% total return of 1H’19.
Corporate credit remains attractive to investors seeking a higher yield than cash and government bonds while retaining more defensive characteristics compared to equities. Higher quality global credit securities currently enjoy strong demand given the historically low yielding environment combin...
Risky assets (equities, commodities) across the board were weak in the fourth quarter and emerging market (EM) debt (JPM EMBI global diversified in US$) lost 1.25% in the quarter as the EM risk premium (spread) rose from 3.35% to 4.15%.
2018 was a challenging year for all Emerging Markets (EM) assets and EM hard-currency debt was no exception: losses from higher US Treasury yields and higher EM risk premia outweighed the running yield and resulted in negative returns for the asset class.
We have recently updated economic climate assumptions for individual countries and, in turn, amended the Neutral Asset Allocation (NAA) for the Diversified Growth Fund. It’s a process that we complete twice a year.
The third quarter of the year was a highly eventful one during which the trade war between the US and China took a turn for the worse.
Emerging market (EM) debt (JPM EMBI global diversified in US$) markets experienced a volatile third quarter but delivered a positive return of 2.3% over the period as the EM risk premium (spread) fell from 3.69% to 3.35%.
Global GDP growth continues at long term trend levels, mainly driven by developed countries where economic growth remains broad based across the household, private and Government sectors.
The emerging market (EM) investment grade (IG) corporate bond market (USD) generated a 0.77% loss in the second quarter of 2018 based on the most widely tracked index, the JP Morgan CEMBI Broad Diversified IG index.
Emerging market (EM) debt (JPM EMBI global diversified in US$) recorded a 3.5% loss in the second quarter as the global environment became more challenging for EM countries.
There have been times, over the last couple of years, when we have felt like a complete muggle. Darker forces (QE and the rise of the machines), have clearly been in the ascendancy.
The latest quarterly update for the First State Investments Diversified Growth Fund.
Global credit markets have been challenged in 2018 and spreads have widened. Asian issuers have not been immune from this volatility. Following another default by a Chinese issuer, we take stock of where markets are currently, what opportunities (if any) are present in the region, and outline how...
Emerging markets in fixed income offer a variety of sub-asset classes that can be invested in a standalone or a combined way, including sovereigns or corporate bonds, local or hard currency (USD), investment grade or high yield bonds and foreign exchange.
There are many opportunities for both structural and tactical allocations to global credit, ranging from passive/smart-beta portfolios to fully active global credit and multi-sector strategies.
Emerging market (EM) debt returned positively in the third quarter, with EM high yield (HY) continuing to outperform EM investment grade.
The quarter started with an upbeat tone amid synchronised global growth, however that dissipated very quickly.
The team’s structure and collaborative investment philosophy targets optimal decision making processes, minimal key-person risk and a strong, collegial credit culture.
Our bottom-up, value-orientated investment process strives to minimise default risk as compared to the broader high yield market.
We believe that the successful implementation of our investment process represents an investment style with lower downside volatility than the overall market and the potential for superior returns over a full market cycle.
High yield bonds are defined as corporate bonds rated below 'BBB−' or 'Baa3', ratings that are considered sub-investment grade, by established credit rating agencies. High yield corporate bonds typically offer higher yields with less duration than most fixed income alternatives.
With Initial Public Offerings in India consistently oversubscribed and valuations peaking, the team discuss their five largest holdings and why now is not the time to sell.
It was an eventful quarter, though most factors were negative which lead to continuous spread widening for almost the entire period. Some of the notable events which kept the market jittery were, tighter monetary conditions in US and Europe, relentless emerging markets outflows amid the stronger ...