The FM Report

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Fixed Interest

Low Bond Yields: Repressed or Something More Fundamental?

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Treasury bonds do not get much respect these days. Institutional fund manager bond weightings are at their lowest levels ever in the 20-year history of Bank of America’s monthly fund manager survey. High profile investors treat them like the plague. The revulsion in sentiment is easy to understand. Who wants to own a negative real yielding asset? Based on the personal … [Read more...] about Low Bond Yields: Repressed or Something More Fundamental?

Green bonds growing in Europe

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Green bonds have been growing in popularity as a way to combat the negative effects of climate change across the globe. Similar to traditional bonds in structure, green bonds offer investors the ability to put their money to work in lessening greenhouse gas emissions. Major governments are now getting involved in this space—with European countries taking the lead. WHAT ARE … [Read more...] about Green bonds growing in Europe

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?