The FM Report

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Fixed Interest

Reverse Yankees Are on the Rise

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Euro‑denominated issuance by U.S.‑ based corporates is surging. American companies pumped approximately EUR 93 billion into the European markets by the middle of December in 2019. Known as “reverse Yankee bonds,” these new issues made up roughly 30% of the total 2019 volume. Rather than viewing this as a short‑term anomaly, we believe investors can look at the influx of … [Read more...] about Reverse Yankees Are on the Rise

Looking Beyond Negative Yields

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Bonds will continue to provide benefits in terms of both portfolio diversification and return in the years ahead. However, with absolute bond yields at low or even negative levels in some markets, we acknowledge that these benefits may be muted relative to historical patterns. These dynamics heighten the need to take an active, global approach to a fixed income … [Read more...] about Looking Beyond Negative Yields

Public versus private debt – what’s the difference?

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With interest rates at historic lows, asset classes such as commercial real estate debt, infrastructure debt and corporate debt are increasingly attractive. But this is not just because of their potentially higher yields. In this article, we compare private debt with public debt (i.e. bond markets). We highlight some of the benefits of private debt investments and the main … [Read more...] about Public versus private debt – what’s the difference?

Time is running out to solve China’s debt bubble

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Many investors are focused on the outlook for trade talks between the US and China, fearing an all-out trade war which would negatively impact global equity markets. But investors are underestimating the mounting problems caused by the rapid expansion of credit in China in recent years. Only radical solutions now remain to resolve China's credit bubble. The fear of a … [Read more...] about Time is running out to solve China’s debt bubble