What are bonds and how do they work?
When a government, or a company, needs capital, it can issue debt securities and fixed income instruments (like bonds) to raise the necessary funds. When you buy bonds and other fixed income products, or hybrid securities, you’re lending money to the issuer (the government or the company that issues the bond). They then agree to […]
2024: Prime Time for Fixed-Income
Despite higher-than-expected U.S. CPI data released last week, there has been a substantial easing in the U.S. annual inflation rate, falling from 9.1% in June 2022 to 3.1% in November 2023. While bond markets wobbled on the news, Treasuries are still pricing in numerous rate cuts this year. This underscores that the market remains steadfast […]
With Rate Cut Expectations Growing – How Should Investors Position for 2024?
Despite persistent strength in the U.S. labour market with wages rising alongside robust job creation, US 10-Year Treasury yields are currently pricing in numerous cuts to interest rates as inflation tapers. Various major U.S. banks also subscribe to this view with Goldman Sachs expecting 3 25bp cuts to the Fed funds rate in March, May, […]
The Gift That Keeps on Giving….and Giving and Giving
Christmas is a time of joy and giving, and with interest rates currently sitting at higher than we have seen over the past several years, corporate fixed-income securities are undeniably proving to be festive investments. While it’s not possible to physically wrap a corporate bond and stick it under your Christmas tree, with highly attractive […]
Will 2024 Be The Year of Fixed Income?
With higher interest rates likely to extend well into 2024 and beyond, now is the perfect time to consider fixed-income allocations within client portfolios, especially as the prospect of a recession lurks. Anaemic Growth Apart from the U.S., most economies appear to be struggling with higher interest rates and elevated (albeit cooling) inflation. This is […]
2023 Reflections – A Year in review
As we approach the end of 2023, now is an opportune time to reflect on the year that was, and plan for the year ahead. With inflation continuing to cool across most major economies, the key question for 2024 and beyond is – how long will rates remain elevated? U.S. Resilience The year 2023 has […]
Cash, Money Markets and Fixed-Income – Same, Same But Different
With both money markets and fixed-income markets offering highly attractive yields, a recurring question we are frequently being asked is – which one should I invest in? Unsurprisingly, there is no simple answer given it depends on the personal needs and requirements of your clients. It’s also important to state that an investment in either […]
Higher for longer – Why you should be considering Corporate Fixed-Income
With corporate fixed-income securities now offering some of their most attractive returns in over a decade, the opportunity cost of having no exposure for your client’s portfolios has become material. Since the Global Financial Crisis (GFC), artificially suppressed interest rates through quantitative easing have significantly distorted the dynamics of financial markets. For bonds and other […]
Corporate Fixed-Income: A Pillar of Stability in An Uncertain Environment
With ongoing uncertainty in global markets, investors are increasingly seeking refuge in assets that can provide a greater degree of stability and peace of mind. In recent times, corporate bonds and other fixed-income securities have often been overlooked in favour of more ‘glamorous’ asset classes like equities which have posted double digit returns on average […]
Capital stability and attractive income – why advisers should be considering corporate fixed income for client portfolios
One year ago, U.S. 10-year Treasury bonds were yielding 0.74%pa while today, they offer 4.61%pa – and coupon payments on corporate fixed-income securities are even higher. With widespread global economic and geo-political uncertainty, it’s unsurprising to see many investors rebalance portfolios in favour of asset classes which can provide a greater degree of stability and […]