European credit investors have enjoyed significant gains in 2019 as the combination of weak economic data and central bank easing has pushed yields lower. Investors will need to be nimble to find attractive risk-adjusted returns in the months ahead.
Investors should review existing policies regarding portfolio rebalancing and tactical asset allocation and ensure they have a strategy to play offense during the next downturn.
Investors should expect more volatility in 2019, as many of the trends and political dynamics that have rattled confidence over the last few months seem unlikely to dissipate in the months ahead.
Although we are more cautious heading into 2019 than we were 12 months ago, we still think a roughly neutral allocation to risk assets is the right approach.
Demand for collateralized loan obligations (CLOs) has soared in recent years, despite lingering suspicions about asset-backed securities due to their role in the global financial crisis. This paper provides an update on recent trends in the CLO market and discusses what we believe are some of the more attractive implementation options.
In this report, we briefly highlight five key post-GFC developments and discuss how investors might adapt their portfolios to these changes.
Worries over the health of US credit markets have risen in recent months, with numerous reports highlighting the growing vulnerability of indebted companies (and thus investors) to rising rates and a potential turn in the economic cycle. This paper provides our updated thoughts across US credit markets, as well as some tactical tilts investors could employ to help navigate a few of these headwinds.
Yes, but investors should be selective in allocating to credit markets at this point in the cycle, and understand that the overvaluation of many credit assets could make attractive returns hard to come by.
Retail is changing and some companies face challenges, but this theme has probably been overhyped, and implications for investors are limited.
In our 2018 outlook, we review the prospects for several asset classes—developed and emerging markets equities, credit, real assets, sovereign bonds, and currencies—and share the advice of our chief investment strategist.