Sharing our convictions

Humans enjoy extrapolating past successes into the future – including when it comes to returns on their investments. Accordingly, baby boomers harbor ambitious expectations whereas millennials do not trust investing. Patterns witnessed over 300 years of financial market history explain what matters when it comes to investing in the current climate. The guide to our return estimates reveals the long-term potential of asset classes and our estimation methods.

"Where defaults get to exactly depends on a few things, but we can certainly analyse where we think the problem areas could be, whether cracks are already starting to appear, and what investors might do to protect themselves."

Twelve months ago, as we wrote our annual review and forecast for 2019, backing 10-year German government bonds that were yielding just 0.24% at the time to perform would have been a brave call.

By now investors should be getting used to the ever more frequent hiccups in the trade negotiations between the US and the rest of the world.

Why did so many well educated and well meaning people not take the plastic tsunami seriously until an island of the stuff became headline news?

"In some parts of the global economy, we might be seeing a bottom in terms of low activity levels." TwentyFour's Felipe Villarroel discusses the factors behind these improving trends.

We don’t know when the next downturn will hit, how severe it will be, or how long it will endure. That’s why we aim to build resilient portfolios by focusing on four essential company traits: competitive advantage, solid management, sustainability of growth, and sensible valuation.

“NIBC, has been involved in ESG/CSR focused lending in Europe for some time, and is the first manager to issue what we might call an ESG CLO." Elena Rinaldi discusses why in terms of ESG, NIBC would receive a high score from us.

"Younited’s funding strategy is as innovative as its business model... In May this year, the company successfully issued its first #ABS backed by French consumer loans" TwentyFour's Ben Hayward discusses.

"We have been participants in the Additional Tier 1 (AT1) sector since its introduction in 2013, albeit with a high degree of selectivity, but the risk-reward has been obvious to us." Gary Kirk discusses the latest AT1 news from Fitch

At this late point in the cycle, fixed income investors are on high alert for signs of potential excess in the capital markets, and a proposal for potentially the biggest leveraged buyout (LBO) in history would certainly fall into that category.

The Senior Loan Officer Opinion Survey, combined with financial results from the banks, is probably still the most useful tool we have for gauging the cycle’s life expectancy.