Fixed income

In November 2023, we estimated that holding cash, as opposed to staying invested, could cost investors 10-30% over a three-year period. At the time, we highlighted that interest rates had reached their cyclical peaks and were likely to decrease from that point.

Collateralised loan obligations, or CLOs, have become an increasingly popular asset class within global fixed income.

Oracle priced an $18bn six-tranche (5yr/7yr/10yr/20yr/30yr/40yr) bond deal which was increased from an initial $15bn on the back of exceptionally strong demand. It is the latest sign that the AI investment boom, long the focus of equity markets, is now spilling into credit.

With the Fed’s stance suggesting it is prioritising growth over sticky inflation risks, volatility in longer dated bonds is likely to persist and the case for increasing duration in fixed income is not compelling.

You can now watch the replay of our webinar: The new multi-plural world: Macro divergence meets yield

Strong performance of EM local currency bonds has been driven by a bearish US dollar and fundamental factors supporting sustainable appreciation toward a stronger equilibrium.