ESG Awakening in the Fixed Income Markets
This important segment of the capital markets, which provides trillions of dollars in much needed capital to publicly traded corporations around the globe, is awakening to the realization that they can and should apply ESG principles to their investment process.
Another Way to Look at LDI
The purpose of liability-driven investments (LDI) is to hedge the pension liability such that rising (or falling) interest rates, and uncertain stock and other asset market returns, will not impair a firm's ability to meet its pension obligation.
Five years ago, we wrote a commentary piece in defense of the "unsexy" (bonds) versus the onslaught of the "sexy" (alternative investments). According to a Wall Street Journal article five years ago, after the 2008 financial crisis, the performance of the largest endowments ($1 billion and up) was expected to lag the performance of smaller endowments. Looking back at the performance of $1 billion and up endowments over the past five years, the Wall Street Journal thesis was correct.
What Happened to My "Anchor to Windward?"
Investors buy bonds for stability. In stormy times, bonds should be a portfolio's "anchor to windward." This commentary analyzes the question of stability and liquidity in the secondary bond market, and also the impact of the Bill Gross departure from PIMCO.
Core Fixed Income is Dead? Not so Fast.
Given today's extreme low nominal interest rates and the fear that real interest rates could be negative for years to come, many investors and consultants are questioning the need for core fixed income.
Senior Bank Loans: Floating Rate High Yield
This report analyzes the "Senior Loan" asset class through the lens of the PowerShares Senior Loan Portfolio ETF (BKLN).
Corporate Bond Liquidity: Going, Going, Gone?
As a consequence of the credit crisis in 2008, big banks have gone into a "de-risking" mode, leading them to decrease the amount of capital allocated to their fixed income trading desks.
The "Technical" Case for U.S. Treasuries
This article briefly identifies and provides insight into the primary factors determining the relative value of U.S. Treasuries on the global stage
Sovereigns vs. Corporates
The quest for safety has led fixed income investors to developed country government bonds, or sovereigns, which have historically been considered low risk.
Securitized Markets: Revisited
Will the securitized bond market return to its heyday and help re-ignite our economy or will it lie dormant? More importantly, how have events of the past changed investor behavior when investing in the securitized market?
Analyzing Fixed Income Risk
A recent Wall Street Journal article highlights that many investment grade fixed income funds are invested in securities such as high-yield corporate bonds, emerging market debt and non-agency mortgage-backed securities. These securities can be very volatile and can lead to steep losses if the market turns.
Paying a Premium
Bond investors are like outlet mall shoppers. Everyone is looking for a big discount, the mall is super crowded, and the real bargains are elusive. In fact, a dirty little secret of the outlet mall business is that the discounted goods are often discounted quality too. You get what you pay for and discounted prices are not all that they are cracked up to be.