Fixed Income

High yield markets are shrinking. Do you know that they have contracted by 25% over the past two years? The ICE BofA BB-B Global High Yield Index has lost $654 million in value. In the meanwhile, investor demand for credit and high yield has rebounded at the end of last year.

February was marked by a strong investor preference for risky assets, with equities on both sides of the Atlantic performing well.

With 2024 underway, many bond investors are still wondering how the environment for Emerging Markets debt will differ from that of 2023.. Indeed, it looks more benign for Emerging Market Debt ….

The major advantage of a convertible bond is its ability to gain exposure to the equity markets while benefiting from downside protection.

Has commercial real estate reached its inflection point? With little transaction activity, price and index data are generated with a lag. Market prices can change much more rapidly than they can be aggregated and reported. Investors must rely on fundamental analysis and experience more than data to time the recovery.

In recent years, new structural trends have emerged, such as the polarization of the world, the re-localisation of supply chains, and the fight against climate change. These new trends are leading to higher inflation and lower growth. This new paradigm is having a significant impact on the financial situation of companies, and therefore on investment in corporate bonds. This calls for strategic adaptation on the part of investors. Adopting a strategy that aims to deliver a performance independent of credit market trends would therefore appear to be an investment solution worth considering in this new environment.

After two months of heavy exuberance in November and December last year, January 2024 was marked by moderation. Returns across fixed-income asset classes were mostly muted as investors dialled back the prospect of rate cuts in Q1 while supply was huge at the beginning of the year.

After 2022, which covered the end of a decade of monetary policy loosening, 2023 has been the year of the repricing of the whole interest rate curve. The end of Central Banks’ "higher for longer" mantra supported a steepening of the yield curves and repriced real interest rates which are back now in positive territory, for the first time in close to ten years.

Markets were very much itching to end 2023 on a high note and delivered strong performances across asset classes, with the exception of commodities.

We continue to discover interesting opportunities in the corporate bond universe. Philippe Noyard, Global Head of Fixed Income at Candriam, Patrick Zeenni, CFA, Head of Investment Grade & Credit Arbitrage, and Nicolas Jullien, CFA, Head of High Yield & Credit Arbitrage, explain how their approach aims to optimise the credit market’s potential with the objective of generating returns.

“Compound interest is the eighth wonder of the world”, said Albert Einstein.

Global equities fell for a third consecutive month in October and gold rallied against a backdrop of geopolitical risks, an under-pressure earnings season and a rising rates environment.

Remember money market strategies? They’re back!  Once the latest rate hike is incorporated, money market strategies can offer yields above 4%!  A record path and close to a record return in money market strategies since 2001.  Money market strategies have regained their popularity as central banks have hiked rates in their fight against inflation.  

September was another bruising month for investors in US and Euro rates. The US 10Y jumped higher than at any point in the past 16 years.

It's back-to-school time, and time for investment decisions... Will the US fall into recession?

Against a backdrop of volatile trading, August saw the return of a correlation between risk assets and rates...

If you were intrigued by our June comment on the return of the money markets (Money markets...

June saw some weak performances in European risky assets and spread products, with European equities, high yield and IG corporates posting negative returns.

As we reach the halfway point of the year, it seems that recession may be avoided on both sides of the Atlantic, but growth forecasts remain weak...

Money market strategies are coming back. The multi-decade bonanza on the back of lower yields and accommodative central bank policies ended abruptly last year.

With equities performing the strongest over the month, the picture was rather mixed for fixed income asset classes, with no clear outperformance from any risky asset classes.

April saw positive performances for risky markets, with equities and convertible bonds outperforming, followed by high yield.

With the upcoming 2023 Turkish presidential election, scheduled to take place on 14 May, we are sharing our views and sentiments on the possible outcomes and their consequences.

In March, markets were driven by the strong performance of most asset classes, confirming a general trend year-to-date in which investors in most major asset classes have been rewarded with positive returns.

Bond investors did have a rough time in 2022. But a new era begun when central banks initiated their forced march of interest rates hikes, bringing some fresh opportunities to investors.