Sharing our convictions

Right now, long-dated bonds seem like a freshwater fountain in the desert to income-starved investors. However, the question of whether these bonds can prove their value beyond being a mere opportunistic tactical play heavily depends on this year’s tightrope walk between inflation and growth.

The curtain has closed on 2022 and a new dance looks set to play out in the year to come. Our Multi Asset Boutique experts are waiting in the wings, poised to capture the opportunities arising from any upcoming shifts in the global economy and financial markets. Vontobel’s latest Investors’ Outlook shines a spotlight on key factors to consider in 2023. It’s time for you to take the stage.

Strong performance across markets in January has left some investors feeling they’ve missed out on the rally in bonds. No need to worry, says Felipe Villarroel.

The euphoria in the financial markets has been driven by falling expectations of a severe recession. Although our models continue to indicate a US recession, this is likely to begin later in the year. This means there is no contradiction in the equity overweighting that is currently suggested by our model.

In our view, European credit now represents a strong medium term value opportunity that investors cannot afford to ignore.

2022 was a stormy year for bonds. As 2023 gets under way, our Fixed Income Boutique heads predict whether bonds are set for a smooth touchdown or a bumpy landing amid the continuing headwinds in the global economy.

High yield markets entered the year at an attractive entry point and investors can enjoy the power of high carry with still solid credit fundamentals. Turning the page on a challenging 2022, the Global High Yield Bond team is hopeful 2023 will be a fortunate year for many things, especially income.

As China readies for the Year of the Rabbit, there are several causes for celebration, says Fixed Income Boutique Credit Analyst Cosmo Zhang. Economic recovery could come earlier and stronger than expected in the first quarter of 2023, as mobility and supply chains return to normal despite a Covid surge.

While European ABS was not immune to negative returns amid the considerable fixed income headwinds of 2022, it gave investors largely what they look to this allocation for – lower volatility and better performance than mainstream bonds. In our view, the forward-looking opportunity looks equally compelling.

TwentyFour Portfolio Manager, Pierre Beniguel, discusses recent market developments in Q4 2022 and provides his outlook for the year ahead.

TwentyFour Partner and Portfolio Manager, Douglas Charleston, describes the developments of the ABS market in Q4 2022.

TwentyFour AM portfolio manager Jack Daley discusses Q4 performance for Investment Grade markets and provides his outlook for 2023.