Asset Management

Vontobel Event “A journey through the bond market landscape in 2021”

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Mark Holman

Chief Executive Officer TwentyFour Asset Management, Portfolio Manager

Over the last few months, the economic cycle has accelerated more rapidly than ever before, to reach mid-cycle within a matter of months. Equally, near-unanimous consensus expectations like the weakening of the US Dollar that we saw at the end of last year have changed direction altogether, whilst an expected tsunami of corporate defaults has failed to materialise.

Investors have had to “unfix their thinking” to cope with these rapid changes and rapidly shift their portfolios as the economic situation has developed, and will need to do so again - repeatedly - as further changes emerge as global recovery continues through 2021.

In the live video below, Mark Holman, CEO and Portfolio Manager at TwentyFour Asset Management and Simon Lue-Fong, Head of our Fixed Income Boutique share their perspectives and outlook, whilst Andrew Salmon, Head of Investment Communications at Vontobel poses the questions. Although the video covers only 45 minutes, we managed to cover a huge range of topics, so please use the timestamps below to jump to the sections which interest you. Or, relax and let Simon and Mark explain their views.

 

 

Topic Time
The Economy  
The economic cycle and correlations 0:44
Bear steepening 3:04
Inflation, money supply and growth 4:20
Central bank actions and inflation targets 6:08
The US Dollar 7:50
European economies, correlation and the PEP 9:27
European inflation outlook 11:21
Vaccination and economic recovery 12:03
Speed of the economic cycle and corporate defaults, upgrades downgrades 12:45
China leading the recovery 17:26
Commodity led recovery 19:05
Implications for investors  
Finding income 20:15
Active versus passive fixed income portfolios 21:53
Yields today 24:30
Allocation to Emerging Markets 26:02
Sectors we like – investing pro-cyclically and embracing credit risks 27:30
Avoiding volatility, sectors affected by structural change and countries facing inflation challenges 30:20
Remainder of 2021  
Moving the portfolio through to year end 33:40
Expectations for 10-year US treasuries at end of the year 37:42
Q&A  
Is it possible to be an activist fixed income investor? 39:50
What are the risks around recovery? 41:45
Summary of key points 44:10
Close 47:58



TwentyFour Asset Management
2021-02-09-FI-Are-Fixed-Income-Bets-All-Pointing-the-Same-Way_teaser
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Are Fixed Income Bets All Pointing the Same Way?

With investors eyeing economic recovery and stimulus firmly in place, credit spreads look set to break through previous tights in 2021. But what could happen if they do? TwentyFour Asset Management CEO, Mark Holman, explains why he believes portfolio rebalancing will likely be the key strategic decision for fixed income investors this year, and why now is the time to plan for it.

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