Fixed Income

Earlier this month, we wrote about the high cost of staying in cash in the Euro market. In that note, we argued that a combination of inflation, low front-end rates and steeper curves, favoured a rotation out of cash and cash like instruments into other alternatives that delivered better real returns, including credit. Building on this argument, we wanted to extend this perspective to the US dollar market and highlight a few key points.

Duration is often said to measure a bond’s sensitivity to changes in interest rates, because it describes what is likely to happen to a bond’s price for a given change in the bond’s yield. For fixed income investors, duration is a crucial metric for understanding how exposed your portfolio may be to changes in monetary policy.

Bond prices and yields move inversely to each other – as a bond’s price falls, its yield rises, and vice versa. Bond yields and prices shift constantly in response to market forces: interest rate expectations, the credit quality of the issuer, and evolving supply and demand conditions.

We believe Swiss bonds continue to offer historically attractive yields to maturity, which look even more compelling when inflation and currency hedging costs are taken into account. The characteristics of the Swiss bond market mean that inefficiencies may arise as a result, which our experienced Swiss Bonds Team seeks to capture through active management to generate added value for clients.

As fixed income investors face inflation surprises, tariff rhetoric and growing concerns around central bank independence, Gordon Shannon, Partner and Co-Head of Investment Grade, explains why the focus remains on resilience.

In our latest Multi-Sector Bond quarterly update, Jakub Lichwa, Portfolio Management, discusses why we retain a favourable view on credit despite tighter spreads.

In our latest Asset-Backed Securities (ABS) quarterly update, Aza Teeuwen, Partner and Co-Head of ABS, explains how strong CLO issuance, robust investor demand and tightening spreads have driven a standout year for the European ABS market.

France is in the news again. Prime Minister Lecornu became the latest casualty of the French politics saga that began just over a year ago when president Macron called a surprise early election.

As investors face tariffs, muted growth, and geopolitical risk, the Fixed Income team explains how emerging-market investment-grade bonds can provide yield and global diversification.

Keeping cool as rate cuts resume and flows are strong.

Learn more about currencies and how they depend on other factors in the economy.

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.