Market Update

In his latest video, George Curtis discusses our views on high yield defaults over the last few months and what he thinks we can expect in 2021

Elena Rinaldi looks back at the performance of European CLOs in 2020 and explains how post-vaccine sentiment should help boost recovery in 2021, providing a positive outlook for CLOs.

Partner and portfolio manager Gary Kirk discusses why he thinks AT1s continue to look attractive in the search for yield. 

History is a good reminder that it is difficult to predict market reactions, and that elections do not have as tremendous consequences on markets as people may believe. Market anxiety over election impact is generally over-exaggerated. The underlying health of the economy and corporate profit growth, ultimately, are the factors that will impact stock prices.

European collateralised loan obligations – or CLOs – are bonds issued to fund a specific and diverse pool of corporate loans to firms of different sizes and in different industries all over Europe.

The ongoing trade war and eroding U.S.-China relationship have been a catalyst for making it less attractive for Chinese companies to seek a public listing in the United States. The Chinese government is finally making good on promises to open up domestic markets to foreign investors. Additionally, Hong Kong and China are taking steps to make local listings more attractive, especially to high-tech start-ups.

Residential mortgage-backed securities (RMBS) are an under-utilised asset class for many investors, despite boasting some of the lowest default rates across the global fixed income market and offering higher yields and greater investor protections than vanilla corporate bonds of the same rating.

The US-China interim agreement reduces recessionary risks in both countries. However, the trade war is far from over and risks of a re-escalation persist.

The current US economic expansion is now the longest in modern history, and investors globally will be seriously contemplating the end of the credit cycle. This late-cycle period could prove particularly challenging. Mark Holman, chief executive of TwentyFour Asset Management presents five tactics for fixed income investing late in the credit cycle.

Despite boasting some of the lowest default rates across the global fixed income market, as well as higher yields and greater investor protections than vanilla corporate bonds of the same rating, Asset-Backed Securities (ABS) remains an under-utilised market for many pension funds. TwentyFour partner Ben Hayward outlines five things every investor should keep in mind when looking at this compelling asset class.