Asset Allocation

Short-term government bonds have enjoyed heightened levels of attention this year, but what will give fixed income investors that extra performance boost as the finish line for 2023 draws closer? Our Fixed Income Boutique’s corporate bond team shares five reasons why switching to actively managed investment grade bond funds could deliver that extra edge.

After the “great repricing” of 2022, is corporate credit now ready for takeoff? Our corporate credit experts, Mondher Bettaieb Loriot and Christian Hantel, analyze the reasons behind the revival of high-grade corporate credit and explain why they remain optimistic about investment-grade markets in Europe and the US.

When comparing the earnings trajectory of emerging markets corporates with that of their developed-market counterparts, many investors consider this a lost decade. Are emerging market stocks now set to bounce back?

High yield markets entered the year at an attractive entry point and investors can enjoy the power of high carry with still solid credit fundamentals. Turning the page on a challenging 2022, the Global High Yield Bond team is hopeful 2023 will be a fortunate year for many things, especially income.

As China readies for the Year of the Rabbit, there are several causes for celebration, says Fixed Income Boutique Credit Analyst Cosmo Zhang. Economic recovery could come earlier and stronger than expected in the first quarter of 2023, as mobility and supply chains return to normal despite a Covid surge.

Traditional investment strategies unraveled in 2022 amid geopolitical and energy crises. As 2023 gets under way, these negative trends have started reversing, giving our Corporate Credit team comfort about the prospects for the European investment grade credit market in the months ahead.

Should we blindly follow a machine? Or is human judgment needed to make weighed decisions? We believe that man and machine must act as a team to achieve the best results. That's why we developed the Wave, which is based on a big data approach and serves as a compass in our investment process.

Welcome to 2023! At the start of the new year, bonfire rituals across the globe celebrate the time for renewal. Our Global Corporate Bond team have evaluated perspectives for the market by asking themselves the ten most burning questions for the year ahead – and finding the answers.

Is it now the time to invest in emerging markets fixed income? As 2023 progresses, there are strong arguments for this asset class. We also believe risk concerns remain manageable. Waiting on the sidelines was perhaps the smartest thing to do in 2022, but may not be the best strategy next year.

In late 2022, financial markets are in the middle of a structural break. This may precipitate a regime change that will alter essential market risk-return features: low inflation, low volatility, and low correlations. This paper tells you why and how investment solutions must adapt to new conditions to continue delivering attractive investment outcomes.

Looking back to previous cycles in the high yield market, data have shown down periods have usually given way to strong returns years. While spreads are set to stay volatile until inflation starts to slow down, Portfolio Manager Stella Ma sees valuations becoming more attractive as we near the end of 2022.

With central banks speeding though their hiking cycles, a return to rates stability could allow investors to reap the rewards of bond yields that are unusually high for this point in the cycle.