European collateralised loan obligations (CLOs) have been a favoured asset class for certain TwentyFour Asset Management strategies over the last several years, and more recently clients have quite rightly been asking why we prefer them to US CLOs.

Scenarios for the US-China conflict and implications for the global economy.

As one of Europe’s leading asset-backed securities (ABS) investors, we are often asked why we haven’t yet sought approval to expand the remit of our strategies to US securitisations. Here are five reasons we think a focus on Europe remains the best-rewarded strategy when it comes to the global ABS market today.

The current US economic expansion is now the longest in modern history, and investors globally will be seriously contemplating the end of the credit cycle. This late-cycle period could prove particularly challenging. Mark Holman, chief executive of TwentyFour Asset Management presents five tactics for fixed income investing late in the credit cycle.

With the election of Boris Johnson as leader of the Conservative Party, and subsequently as the next UK prime minister, the chances of a ‘no-deal’ Brexit took a decisive tick upwards. We believe the UK ABS market will be an effective defensive holding against the deep uncertainty around the Brexit outcome, and one which could also offer some material spread upside given the premium currently being priced into UK assets.

Despite boasting some of the lowest default rates across the global fixed income market, as well as higher yields and greater investor protections than vanilla corporate bonds of the same rating, Asset-Backed Securities (ABS) remains an under-utilised market for many pension funds. TwentyFour partner Ben Hayward outlines five things every investor should keep in mind when looking at this compelling asset class.

We view ESG as integral to a company’s long-term potential – much like safety when driving. If you drive without using the mirrors, it does not mean you will get to the supermarket quicker or slower the first year, but with time the chances of a costly encounter rise.

For fixed income investors, it has been impossible to ignore the proliferation of press coverage about the growth of the triple-B rated corporate bond market, and a coming wave of downgrades for companies rated BBB to high yield, with these ‘fallen angels’ exposing investors to mark-to-market losses at best, and defaults at worst.

Investing in emerging markets has merit. This is what institutional investors have started to recognize as they are increasing their allocations to emerging markets, albeit slowly. Investing more into EMs comes with challenges, however, as the dynamics driving the asset class are changing.