Market Update

A member of the Multi-Sector Bond team discusses market conditions in Q3 2021 and provides her outlook for the rest of the year.

Recently Chinese regulators have become more assertive, causing concern among the international investor community. The key in helping investors navigate and, hopefully profit from these changes, is to understand the bigger picture and what the government is ultimately trying to achieve.

If we suppose a bond investor views an upcoming event as a potential threat to their positioning, they may attempt to hedge their portfolio with another position. The event passes, and the hedge works, but to the investor maintaining the hedge seems like a good idea in the aftermath. Do you maintain the position or remove it?

TwentyFour's CEO, Mark Holman, discusses market conditions in Q2 2021 and provides his outlook for the year ahead.

TwentyFour Partner and Portfolio Manager, Gordon Shannon, discusses how the short term bond strategy has performed in Q2 2021 and provides his outlook for the upcoming months.

TwentyFour Partner and Portfolio Manager, Douglas Charleston, explains how ABS markets have performed in Q2 2021 and provides his outlook for the year ahead.

According to Mark Holman, CEO at TwentyFour Asset Management (a boutique of Vontobel Asset Management), he is currently spending at least 40% of his time talking about inflation, or more accurately, why the US Federal Reserve seems to have a different view of inflation to almost everybody else.

After a hawkish turn from the Fed at its June policy meeting, the response in US Treasury markets has confounded market participants and intensified the debate over ‘transitory’ inflation.

Strong momentum across many markets has increased investors’ concerns about inflated valuations. As the “growth-at-any-price” trade seems to be fading, many believe a rotation out of growth stocks and into value may continue to outperform the broader market. Before you rearrange your portfolio in light of the current rotation, here are a few things to consider.

While higher interest and inflation rates may more predominantly impact owners of long-duration assets in a variety of ways, they are also simply a positive signal of strong economic growth, which is a good thing. They also should enable for a more generally healthy pricing environment for risk assets. Higher interest rates are not necessarily something terrible to be only feared.

With US President Biden’s $1.9 trillion Covid relief package, alongside the recently proposed $2.25 trillion in infrastructure projects, there is growing concern about the impact these programs could have on inflation and interest rates globally. In the investment world, we have been operating amid declining rates and low inflation for so long that few may realize the impact rising rates would have on investment returns.

TwentyFour partner and portfolio manager Gordon Shannon looks at the developments we saw in investment grade credit in the first quarter of 2021 and provides his outlook for the rest of the year.