Viewpoint

As we approach the quieter summer months, fixed income investors have some good news and they have some bad news.

10 million lab animals undergo tests with severe pain each year. Over time, companies have aligned with customers. The near-term exit for lab animals relies on regulators. A 2021 breakthrough in China shows progress. But the underlying driver is remarkable advances in technology. Management views and outlook in this blog.

European equities have lagged the US for more than a decade. But there are reasons to believe that Europe can outperform again: The benchmark is now more exposed to higher growth companies, valuations are attractive, macro reforms have mitigated risks and Europe is leading the way in ESG.

Since their inception in 2013, Additional Tier 1 (AT1) bonds have developed into a $250bn multi-currency asset class that, with a high level of due diligence, can offer an attractive opportunity for fixed income investors facing another decade of ultra-low yields.

High-growth, high-momentum stocks were among the best performers of 2020, then value stocks rallied into the first quarter of this year. We are cautious of valuations, as some stocks have already priced in a recovery. Investing in quality companies with predictable earnings power at reasonable valuations can help investors prepare for a rainy day.

Chinese equities can offer an exciting and dynamic opportunity, but investors must navigate a complex regulatory environment and quickly changing competitive dynamics. Our research team sheds light on the outlook for e-commerce giant Alibaba, how to approach the A-shares universe and pressing issues investors face in China today.

Even as the broader geopolitical environment and global economic uncertainty continue to impact the headlines on China, strong growth prospects underpin several sectors and companies.

While the US is home to many global leading companies, it is not the be-all and end-all for investors. Actively allocating to international equities can bring the benefits of diversification. We believe a portfolio that combines the best of domestic and international quality growth equities is the right choice for long-term investors today.

Airbnb’s stock soared after its IPO, but it is not yet profitable and faces many competitive threats. Meanwhile, its rival Booking Holdings is an established leader with a proven business model and a more earth-bound valuation. We think Booking is a true quality company with a solid track record, not a speculative bet.

TwentyFour Asset Management CEO, Mark Holman, explains why the likes of Warren Buffett and Ray Dalio are warning investors away from fixed income, and points out where he thinks they’re wrong.

Stop fraud bleeding returns. Fraud from related party transactions, kickbacks and fiddling the books can run for years. The steps to minimize risk are based on 3 governance structures – independence from management is key. Amazing how often they are not in place, especially in some markets.

All-star New York Yankees pitcher Lefty Gomez once said: "I'd rather be lucky than good.” Successful investing over time is, however, not a game of luck. It requires discipline, skill and a focus on quality. Investors can prepare for a downturn by focusing on quality businesses with predictable earnings growth.