Sharing our convictions

Credit assets generally performed well in the first of half of 2026, despite periodic volatility driven by the Iran war and concerns about AI disruption and private credit.

TwentyFour Asset Management’s Elena Rinaldi reflects on a quarter in which Asset-Backed Securities (ABS) and Collateralised Loan Obligation (CLOs) markets demonstrated resilience despite heightened geopolitical and market volatility.

TwentyFour Asset Management’s Diva Bashay reflects on a quarter which tested market sentiment through geopolitical tensions, shifting interest rate expectations and UK political developments.

TwentyFour Asset Management’s Gordon Shannon reflects on a quarter shaped by geopolitical tensions, government bond volatility and shifting central bank expectations.

The primary risk in a fixed income portfolio is credit risk – the risk that a bond issuer will fail to make payments (or “default”) on its debt.

The reopening of the Strait of Hormuz has reduced inflation concerns. While tight credit spreads limit upside, fundamentals and technicals remain supportive of fixed income markets. We are modestly constructive but cautious, particularly on private credit, where complacency around liquidity risks appears underappreciated.

The closure of the Strait of Hormuz reignited inflation concerns and prompted major central banks into a more hawkish stance. While inflation has risen, we believe the shock is temporary, making further ECB and Fed tightening unlikely. An additional hike from the BoJ is likely, in our view, but it risks moving too slowly.

EM fixed income stayed resilient through the war-induced shock. As oil prices fell, inflation remained contained. Capital inflows resumed after a brief interruption and sovereign rating upgrades continued. We believe the asset class is supported by elevated global risk appetite, attractive local-currency yields, and diversification away from US assets.

The investment grade market faces an AI-driven supply surge as hyperscalers reshape credit dynamics. In high yield, surface stability masks elevated issuer dispersion and structural divergence, while CHF markets remain supported by benign inflation, strong demand, and favorable seasonal dynamics.

Collateralised loan obligations (CLOs) are securitisations backed by a large pool of senior secured corporate loans, which are financed partly via selling bonds to investors.

Multi-Asset Credit (MAC) is an active, unconstrained fixed income strategy that targets higher returns for investors who accept greater market and credit risk.

Vontobel’s experts assess the implications of the latest US-Iran deal for inflation and interest rates, exploring the policy outlook for the Fed, ECB and Bank of England, and discussing where opportunities and risks may emerge across fixed income markets.

Emerging markets have been taking up a bigger share of investors’ attention. But why? Watch these videos to take a look at the bigger picture.

Having initially expected central banks to cut interest rates in 2026, investors now face a hawkish pivot after the European Central Bank (ECB) hiked rates at its June meeting.

In an increasingly deglobalized world, governments are seeking energy and commodity autonomy in the form of domestic supply chains and strategic reserves. What does this mean for the energy transition?

The conflict in Iran has driven a sharp repricing at the front-end of rates markets, pushing central bank expectations from cuts to hikes in a matter of weeks. While the reaction is understandable given the inflationary impact, the scale of the move has left front-end yields on a more attractive footing.

Our Quality Growth team outlines an approach to building resilient portfolios that can also deliver attractive growth. The team seeks to identify companies with superior profitability, predictable earnings growth, and appropriate valuations. They classify quality companies into three categories: Leaders, Defenders, and Opportunistic, while balancing growth and stability.

China’s luxury market is being reshaped: ultra-high-end brands remain resilient, while mid-tier players face pressure from premium and domestic competitors. Consumers are shifting spending toward experiences and local brands, with uneven recovery and opportunities emerging in platforms and adaptable operators.

Portfolio manager Ed Walczak shares his thoughts on his trip to the Berkshire Hathaway annual meeting, his 30 th visit. He focuses on investing versus speculating in today’s AI-obsessed market, and how sticking to a discipline might be harder but more important than ever.

Factor concentration is back in focus. This paper revisits portable alpha for today’s macro regime, showing how a select set of fixed income strategies with orthogonal return drivers may improve portfolio outcomes without changing the underlying beta.

UK government bond yields have pushed higher this month as markets have digested a building political crisis, with the prime minister, Sir Keir Starmer, now set to face a Labour Party leadership contest following dire local election results on May 7.

Markets have held up surprisingly well, even as pressures build beneath the surface. Since the war in the Middle East began in February, investors have had to contend with rising energy prices, renewed inflation concerns, and a quasi-U-turn in monetary policy expectations.

Like oil once powered the industrial era, chips have become a key input powering broad economic activity, with expectations for demand to continue through 2026 and into 2027. In our view, “picks-and-shovels” companies should benefit regardless of which model, hyperscaler, or foundation lab ultimately wins.

Galderma is a pure play dermatology company with steadily growing aesthetics and skin care franchises. Galderma’s Dysport is taking share from Botox, while Nemluvio, its novel itch biologic, is gaining traction. We believe the company may see long term revenue and profit growth ahead. Turns out, demand for better skin is remarkably durable.