Viewpoint

By the end of this historical election year, nearly half of the world’s population is expected to have gone to the polls to vote for their respective leaders. In the world’s biggest economy, the race has yet to be decided. What might a second Donald Trump term mean for net zero if he were to be re-elected?

Previously considered a niche strategy, quality investing is popular today for a simple reason – it has worked. While there are many nuances in defining a quality company, we focus on five convictions that we believe separate us from other managers.

This latest article from Fixed Income explores the potential of Emerging Markets (EM) in the current economic landscape, despite significant outflows and perceived risks. Despite outflows and perceived risks, EMs offer promising opportunities for fixed income investors.

Former journalists are a key part of the Quality Growth approach. Their unique skill set brings fresh perspective and sparks healthy debate during the research process. This has been shown to help identify trends ahead of the market, avoid potentially costly investment mistakes, and test new and existing investment rationales.

Child labor and imposing unnecessary medical procedures on women were recently identified in the sugar industry in India. While multinationals such as Pepsi and Coca-Cola are not directly linked to poor labor conditions, they can affect change. As active investors, we engage with our portfolio companies on these important issues.

Quality investing in the fixed income sector is as much about making sure that we avoid the losers as it is about trying to pick the winners.

Quality companies can keep pace with bull markets due to above-average profitability and consistent growth prospects. In bear markets, investors flock to quality companies as their stable earnings and strong balance sheets can minimize drawdowns. While now may be the time for quality, this style can perform well in different market regimes.

The beginning of a new year is often when we look to change the way we behave, but how we invest can also influence our behavior. From inspiring confidence to encouraging discipline, our Chief Economist, Dr Reto Cueni examines how investing in quality can have positive effects on investor behavior.

Fresh water is an essential but scarce resource, plentiful in some regions and sparse in others. On World Water Day, our Chief Economist Reto Cueni examines the global risk landscape related to water scarcity, and possible solutions to alleviate a growing problem.

The end of rising interest rates in Europe and the US, attractive yields, and lower-than-expected default rates mean investors can get higher income without taking on as much risk as they had to in the past. In our view, less volatile, high quality fixed income products are poised for strong performance in 2024.

Is ESG simply a different label for quality or could quality stand as a less controversial and politically sensitive description of highly sustainable companies? The question of whether ESG characteristics of listed companies form a new independent factor and a distinctive source of returns is an important one to address.

Many US investors are overweight domestic versus international strategies for the wrong reasons – home bias and benchmark anchoring. In our view, investors should focus on great companies, regardless of where they are domiciled. An active international strategy can help US investors expand their opportunity set, diversify risks, and improve their portfolio returns.