Sharing our convictions

With the UK’s Office for Budget Responsibility (OBR) set to publish its updated economic and fiscal outlook on March 26, we are starting to see headlines concerning potential changes the Labour government could make to its budgeting plans in response to shifting forecasts.

Investigative analyst Zhen Li recently attended the Shanghai’s second Global Developer Conference. Zhen’s on-the-ground research reveals concerns about the viability and sustainability of DeepSeek’s model given the intense competition in China's AI sector and lack of clarity around monetization of AI models.

We remain cautiously optimistic about Fixed Income returns. Tail risks are elevated, which dampens our confidence in “risk on” markets. But alpha opportunities still await risk-aware, active investors. Those who try to predict the next major macro shift may find themselves echoing Luke Skywalker’s words, “your overconfidence is your weakness.”

The incoming German government’s removal of the country’s infamous “debt brake” is a serious pivot for the typically fiscally conservative country, and one that we think highlights the value on offer in European assets.

Traditional volatility models often lag real market shifts, leaving portfolios vulnerable. Our new Quanta Byte introduces State-dependent Risk (SDR) - a dynamic approach that adapts faster to evolving conditions. By leveraging historical patterns and similarity measures, SDR more accurately forecasts volatility, helping investors navigate risk and protect their ascent.

Challenging entrenched biases, this special International Women's Day Quanta Byte decodes the myth of meritocracy in finance. Featuring insights from Prof. Renée Adams and Ola Mahmoud, discover how data dismantles stereotypes and reveals why perceptions of women in finance often stray from reality.

Hedging currency or foreign exchange (FX) risk is a key decision for any manager running a diversified fixed income portfolio. Currencies are inherently volatile, so whether and how FX risk is managed can have a material impact on a portfolio’s risk and return profile.

European government bonds have sold off sharply this week in the wake of Germany’s market-moving fiscal measures, while European equities, especially those of banks, have moved in the other direction.

Overnight, the CDU/CSU (the winner of the latest German election) and the SPD (the leader of the current parliament set to end on March 25) announced Germany’s largest fiscal policy shift in decades.

New world order with Trump 2.0 at the helm. New day, new risks. What’s keeping investors awake at the moment and how does this impact EM Fixed Income?

Last week, risky assets continued to experience a somewhat volatile period. The tone was generally a risk off one, with correlations between risk free and risky assets back to negative.

The driving force behind this performance is the Chinese tech sector, fuelled by hopes that a larger adoption of AI could boost earnings. A confirmation of improved earnings, the resurgence of consumption confidence and sequential stabilization of the overall economy will be needed to solidify and extend the recent rally.

The Additional Tier 1 (AT1) primary market has begun 2025 with a bang, with a sterling perpetual non-call seven transaction from NatWest that hit the screens on Wednesday morning set to take issuance over €16bn equivalent year-to-date, more than double the volume we have seen over the same period in each of the last five years.

Energy and resource efficiency is often underappreciated, but it has played a pivotal role in driving global emissions lower. Explore how we can benefit from the diverse opportunity set that efficiency brings, and why we believe its importance is set to continue.

European banks‘ full year 2024 reporting season has now largely come to an end, with only a handful of issuers still to report over the next few weeks.

Since the Federal Reserve first cut interest rates in September, we have seen the most aggressive rise in US Treasury yields of any cutting cycle over the past 40 years.

The recent rally in European fixed income has partly been driven by improved economic sentiment, falling inflation expectations, and a more accommodative monetary policy outlook from the European Central Bank (ECB) and the Bank of England (BoE).

Factor investing has long explained market behavior, but its flaws—timing dependencies, rigid linearity, and backward-looking assumptions—limit predictive power. Can AI overcome these? This Expl(AI)ning episode dissects factor evolution, their pitfalls, and how machine learning enables dynamic models. Dive into quantitative investing’s future.

In a week when US core consumer price inflation unexpectedly rose to 0.4% month-on-month and Federal Reserve (Fed) chair Jerome Powell told Congress the central bank was in “no hurry” to cut interest rates, many market participants have been surprised by the relatively muted reaction in US Treasuries (USTs).

People and organizations demonstrate their moral compass in challenging conditions. In 1999, portfolio manager Ed Walczak made a tough call to stick to his investment principles. Despite the pressure to conform to the market trend, he chose to invest in undervalued insurance companies, a decision that paid off when the internet bubble burst.

Manufacturing data has been a relentless purveyor of bad news for the best part of the last 24 months, as abnormal growth rates post-Covid turned into a swampy contractionary trend from which the sector has struggled to emerge.

Artificial intelligence (AI) is transforming our world at breakneck speed to boost its users’ productivity gains in various industries. The associated need for innovation, resources, and infrastructure investments, reinforced by politics and demographics, positions the providers of convincing solutions as potential future winners.

As we approach the end of the Q4 2024 earnings reporting season for banks, most are now out of their “blackout” periods which means bond issuance has resumed. Wednesday was an active day in primary markets with a couple of deals that are worth commenting on.

Focusing on the hit rate: not every trade needs to be a winner. Like Federer’s 54% point success that translates into 80% match wins, flipping losing positions can amplify returns. Our latest Quanta Byte explores how even modest improvements in selection can propel consistent portfolio outperformance across market cycles.