Sharing our convictions

With spreads well below long term averages and government bond curves pricing in what central banks are likely to do in the next few quarters, opportunities for capital gains through spread compression or sustained rallies in government bonds appear to be limited.

Historically, one of the key sources of stability in European ABS has been ratings. The market has long seen upgrades consistently outnumber downgrades, even during periods of stress, most recently during Covid-19.

Explore the Global Credit Outlook 2026: A concise overview of key trends in global credit markets, from macroeconomic shifts and corporate fundamentals to AI-driven investments and market opportunities. Gain insights to navigate the year ahead effectively.

On Monday, risk markets opened on the front foot after largely shrugging off the weekend’s geopolitical news. Stock markets rallied, led by large-cap energy companies that stand to benefit from the "opening" of Venezuelan oil markets, while credit spreads were tighter across the board, continuing the positive trend seen at the end of last year.

2026 began with the global acknowledgement that the TACO mantra (Trump Always Chickens Out) does not apply to foreign policy. We believe this sends a clear message to leaders of small and medium-sized countries opposing or refusing to cooperate/negotiate with the Trump administration.

The new year has begun with a jolt for market participants after the US carried out a military operation in Caracas over the weekend, capturing Venezuela’s president Nicolas Maduro and his wife.

The 2026 Large Language Models Outlook examines the current state of artificial intelligence as it relates to LLMs, highlighting diversity, specialization, and global competition. Learn how open- and closed-weight models, regulatory approaches, and strategic deployment are shaping industries today, from finance to mathematics, and explore the trends likely to define AI’s trajectory in the year ahead.

As we approach 2026, high equity valuations, shifting inflation dynamics, and rising cross-asset dispersion are reshaping the investment landscape. With traditional portfolio strategies like the 60/40 model facing new challenges, diversification is becoming a practical necessity. The Solutions team from the Quantitative Investments Boutique explores how these structural shifts are driving the return of the multi-asset cycle and what it means for investors navigating this new market regime.

European ABS investors saw just the second solar loan-backed deal price recently, a German offering titled Golden Ray 2. The transaction marks a further incremental development towards sustainable financing in the European securitisation market. It also comes at a time when the much larger and established US solar market has encountered headwinds.

It is the nature of financial markets that the trends and risks investors have their eye on at the start of the year are seldom the trends and risks they have their eye on by the end. Below is a selection of charts depicting some key trends we have seen develop in 2025, all of which we believe will have implications for investors heading into 2026.

You can now watch the replay of our webinar: Charting the Path for Fixed Income in 2026.

As we approach the end of 2025, we have been taking stock of the key themes of the year and any lessons we can take from them. It has been a strong year for European high yield (HY) credit, with solid performance for the index as a whole and average yields compressed by around 40bp over the course of the year.

Nothing beats an 11-hour flight back to London for evaluating the outlook for collateralised loan obligations (CLOs), having attended the Opal CLO conference in California.

On Thursday, the European Central Bank (ECB) published a report setting out a number of proposals for simplifying the regulatory framework for banks.

Looking ahead, we expect continued inflows, rising demand, and reduced supply to support EM hard-currency bonds. For EM local-currency bonds, we believe the current macroeconomic environment remains favorable, despite our conviction in a USD bear market being lower than it was a few months ago.

As we approach 2026, Fixed Income markets are shaped by weaker fundamentals, though lower uncertainty may reduce the likelihood of a catastrophic decline. That said, volatility will remain a defining feature. We believe the year ahead holds great potential for active managers who remain steady at the wheel: cautious but nimble.

The surge in AI capex is driving a rapid increase in bond issuance in the investment grade market. High yield bonds are on track to generate solid returns for 2025; we continue to favor telecoms and energy. The Swiss bond market has once again moved to its own rhythm.

In a K-shaped economy, high-income earners and large corporations thrive while low-income groups and small businesses struggle. This divergence challenges the Fed, as its policy decisions traditionally rely on GDP, unemployment rates, and inflation. However, K-shaped dynamics are often hidden behind these aggregate measures.

As we approach the end of a year that has seen risk assets shrug off US tariffs and mounting concerns over AI-driven tech valuations, TwentyFour Asset Management’s portfolio management team selects the seven key questions that they believe will define 2026 for fixed income investors.

AI is expanding what systematic investing can achieve — from unlocking deeper insights in complex data to building more adaptive, responsive portfolios. This piece explores the shift from classical quant to Quant 2.0 and what a more adaptive, data-driven future could look like.

Late last month, the UK’s Office for National Statistics (ONS) published updated migration numbers for the year to June 2025. As we argued here, immigration will be an important variable to monitor when it comes to assessing the health of labour markets.

After solid stress test results from UK insurers last week, on Tuesday it was the banks’ turn as the Bank of England (BoE) published its 2025 stress test results along with December’s Financial Stability Report.

The terms private credit and life insurance have appeared together in multiple negative headlines in recent weeks, and to casual observers the link between the two may not be immediately obvious.

While the promise of AI remains compelling, its market dominance and reliance on external financing create vulnerabilities. By seeking opportunities in areas of predictable growth and resilience – both within and outside the AI ecosystem – we believe investors can better navigate the uncertainties ahead.