GLOBAL INVESTMENT INSIGHTS

“We believe fixed income investing over the next few years is going to look quite different than the past few years.

“Our expectation is for market volatility to rise as central banks no longer desire to suppress the cost of capital, to push demand forward and stimulate growth. With rising volatility comes the risk of dislocation, which in our view calls for fixed income portfolios and fixed income asset allocation to be managed with a much more nimble and flexible approach, which contrasts with the predominant ‘siloed’ approach many managers take to fixed income investment management. The speed which credit spreads widen and subsequently recover has increased over the past decade, and most notably during the COVID crisis. This affirms our conviction that flexibility with respect to both a manager’s investment style and institutional investor asset allocation decision making will hold greater importance in achieving successful outcomes”, commented Jeff Klingelhofer, Co-Head of Investments and Managing Director, Thornburg Investment Management.

Jeff will be presenting at Global Investment Institute’s upcoming Fixed Income & Alternatives Investment Forum, taking place on Thursday, 7 September 2023 at the Westin Melbourne, Victoria.

To register your interest in attending, click here or for more information email zlatan.kapetanovic@globalii.com.au.

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“Large global end users (corporations), that need access to transport assets as a critical part of their supply chains, have historically not been interested in owning the assets, creating a need for off-balance sheet financing in the form of leasing capital. Given heightened regulations from Basel III and IV, banks have largely exited the transport financing business, which has allowed J.P. Morgan Asset Management’s Transport Group to position itself as a leading lessor in the worldwide maritime and energy logistics sectors”, commented Anurag Agarwal, Managing Director, Head of Portfolio Management, Global Transportation Group, J.P. Morgan Asset Management.

Investment in this asset class is suitable for investors looking for: diversification within their portfolio, or a specific allocation to a diverse alternative investment, predicatble income/uncorrelated returns, inflation protection, resilient asset class, steady cash flow or an alternative investment that is ESG aligned.

Anurag will share his expertise on the asset class at Global Investment Institute’s upcoming Fixed Income and Alternatives Investment Forum, taking place on Thursday 7 September 2023 at Westin Melbourne.

To register your interest in attending, click here or for more information email zlatan.kapetanovic@globalii.com.au.

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“The net-zero transition brings both risks and opportunities to the global equities/value space. On the risk end, value portfolios tilt toward carbon-intensive firms and hence are subject to transition risks associated with rising carbon prices.

“Research suggests that a portfolio tilt toward green firms is unlikely to insulate sufficiently against net-zero transition risks. There also needs to be a within sector-by-country selection process that accounts for firm adaptability to demand and supply shocks due to climate policies”, remarks Dr Harrison Hong, Academic Advisor, LSV Asset Management.

Harrison will be presenting at Global Investment Institute’s upcoming Equities Investment Forum, taking place on Wednesday, 6 September 2023 at the Westin Melbourne, Victoria.

To register your interest in attending, click here or for more information email zlatan.kapetanovic@globalii.com.au.

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“Despite a challenging market environment since the taper tantrum of 2013, emerging market debt has outperformed global fixed income alternatives over longer time horizons. We believe the conditions are once again in place to support an allocation to emerging markets debt. Growth differentials increasing in favour of emerging markets, peaking developed markets policy rates, and still elevated emerging markets real yields offer opportunities.

“Given the current late cycle dynamics and significant dispersion across countries in terms of fundamentals and valuations, we believe being selective among both the different segments of the market and individual countries will be key to capturing opportunities and mitigating risk in emerging markets debt”, commented Denise Simon, Managing Director, Portfolio Manager/Analyst, Lazard Asset Management.

Denise will be presenting at Global Investment Institute’s upcoming Fixed Income and Alternatives Investment Forum, taking place on Thursday 7 September 2023 at Westin Melbourne.

To register your interest in attending, click here or for more information email zlatan.kapetanovic@globalii.com.au.

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“It is one of the longest-running debates in investing: growth vs. value. For decades, leading financial minds and countless investors around the world have gone back and forth over which of the two major investment styles is the more effective and reliable strategy for outperforming the markets.

 2022’s volatility saw a major reversal in growth’s decade-and-a-half of dominance. Now, a tiny sliver of growth has contributed to one of the narrowest rebounds on record, with eight stocks contributing to 55% of the ACWI index’s performance in the first half of 2023, potentially setting investors up for another fall. Is your focus on style investing giving you ‘bad breadth’ and is it time to move on from style investing altogether?”, asks Rob Hinchliffe, Portfolio Manager, Head of Global Sector Cluster Research, PineBridge Investments.

Rob will be presenting at Global Investment Institute’s upcoming Equities Investment Forum, taking place on Wednesday, 6 September 2023 at the Westin Melbourne, Victoria.

To register your interest in attending, click here or for more information email zlatan.kapetanovic@globalii.com.au.

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“Investors seeking to mitigate climate-change risk have traditionally focused on de-carbonisation by reducing exposure to companies with relatively high carbon emissions or fossil fuel reserves. While these strategies have reduced carbon exposures, they can bring unintended risks. We think investors need to take a more nuanced view to prevent sector biases, low-quality financial fundamentals, and poor ESG performance”, remarks Dr Michael Hunstad, Deputy CIO and CIO of Global Equities, Northern Trust Asset Management.

Michael will be presenting at Global Investment Institute’s upcoming Equities Investment Forum, taking place on Wednesday, 6 September 2023 at the Westin Melbourne, Victoria.

To register your interest in attending, click here or for more information email zlatan.kapetanovic@globalii.com.au.

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