The beauty of EM investing is you can find opportunities in stocks or bonds beyond the narrow focus of headlines.
Credit risk-transfer securities (CRTs) have made the US mortgage market safer by shifting default risk from taxpayers to private investors. The latest attempt to overhaul the housing finance system isn’t likely to change that.
Many equity investors want to help create social benefits while generating strong returns. Deploying a clear investment process that draws on the UN Sustainable Development Goals and integrates ESG factors in research can help investors achieve these twin goals.
European Banks have mostly been magnets for bad news and disappointment for their equity holders. But we believe other parts of the banks’ capital structure offer solid returns, backed by resilient balance sheets.
Why should emerging-market investors exercise caution in a rising market? With big unresolved challenges, we think it’s prudent to target companies with solid fundamentals and stable business models to overcome macroeconomic uncertainty and build a resilient portfolio for the long-term.
Emerging-market bonds got off to a strong start after a difficult 2018. Are more gains possible? We think so, and volatility sparked by increased trade tension may provide a buying opportunity for selective investors.
Technology unicorns are in the spotlight, with Uber’s high-profile IPO expected this week. As scrutiny of their business models intensifies, we think investors should also ask tough questions about publicly traded companies with high sales growth but scant cash flows.
Risk assets have bounced back this year after a dreadful finish in 2018, with a big assist from the US central bank. But are markets overlooking the potential for problems down the road?
Investors often ask how it’s possible to allocate capital to European stocks given the political risks that abound. We think the answer is to combine disciplined stock picking with risk-management tools that look for unintended threats to a portfolio.
The financial industry and the muni market has lulled a generation of muni investors into using only one approach: buy and hold to maturity. That was fine in the past, but everything’s changed post-2008 and it’s time for a better muni strategy.
Global stocks rebounded in the first quarter, but the ride was rocky. Even in a rising market, volatility is a clear and present danger. With so many risks clouding the outlook, we believe that investors should focus on generating a smoother pattern of returns.
US inflation has been running low for some time, and key members of the Federal Reserve Open Market Committee (FOMC) are pointing a finger at the traditional policy framework. So rate hikes are on hold for the time being—and monetary policy is under the microscope.
The S&P 500 Index hit an all-time high on April 23, thanks to improving investor optimism. But for some equity investors, market highs signal a good time to reduce downside risk. Shifting a modest allocation into US high yield is an efficient way of doing just that—significantly lowering overall risk while only modestly curbing potential returns.
The market has grown less anxious about an imminent wave of bond downgrades. That’s good, because overestimating the risk can lead to missed opportunities. But the risk hasn’t disappeared, making research as important as ever.
From rising sea levels to catastrophic weather events, investors can’t afford to ignore the risks of climate change. Since many companies would be vulnerable if current climate forecasts materialize, asset managers may want to consider climate change in their equity research process and engage management teams on the subject.
The US yield curve dipped into inverted territory recently. But that’s not necessarily a bad omen for equities. There are several important warning signals—and lately the yield curve’s slope is the only one flashing red.
These are tricky days for the global economy. As growth downshifts and corporate earnings weaken, some investors are dusting off playbooks for late-cycle investing. That makes sense, but there are a few twists to today’s market conditions that may require new responses.
In recent weeks, the US yield curve has been making investors nervous again. The curve has inverted before each of the last seven recessions, and it did so again on March 22. But what does an inversion really mean for equity returns?
The European Union has given Britain seven more months to sort out its exit plans. While the chaos of a disorderly Brexit has been averted for now, we think the compromise could have some unintended consequences.
n today’s low-growth, low interest-rate environment, investors should be patient, and look for opportunities to use volatility to get into desirable investments at the price you’re willing to pay.
Global equities rebounded sharply in the first quarter from the sell-off in late 2018. But conditions remain shaky and caution is warranted. Investors should pay close attention to policy-related risks when considering their allocations.
Signs of a recovery in emerging markets early this year have given way to worries about China’s economic slowdown and sluggish growth in Europe and Japan. But beyond the negative headlines we think many risks that weighed on the market last year have faded and the earnings outlook is relatively strong.
Many US companies have forgotten how to raise prices because they haven’t had to for a long time. In some sectors, such as retail, pricing power has been hobbled by the giant consolidated retailers, leaving other businesses unable to adequately offset inflationary pressures.
Last week’s meeting of the Federal Open Market Committee (FOMC) surprised even those who expected a dovish outcome. As the Fed wrangles with its policy framework, one takeaway is clear: don’t expect rate hikes this year—and possibly next.
As economic cycles enter their later stages, investors sometimes find that they’re taking too much risk to generate income. There’s a strategy that can help—and we think now is the time to use it.
Now that the UK has avoided (at least for now) a hard Brexit as it negotiates to extend Article 50, investors might reasonably wonder whether they can relax for a moment and take stock of the bigger picture. What sort of longer-term future does the European Union (EU) have, irrespective of the UK?
Just over a decade ago, global markets began to recover from the biggest shock in postwar history. These 10 charts show both how much has changed since then and how post-crisis market conditions may influence the next decade.
Nearly three years after the UK voted to leave the European Union (EU), the deadline for Brexit is less than two weeks away and the British government is asking for more time. While it’s easy to be distracted by the ongoing chaos in Parliament,
The US high-yield bond market has an impressive record when it comes to recovering drawdowns quickly. But how much can an investor who stays put reasonably expect to earn?
No one organization is responsible for the advancement of women, and that means every organization is. Women’s empowerment starts with education. It continues with the ability to earn an equitable living, especially in fields where women are underrepresented, and crests with women playing leadership roles at work or owning their own businesses.
Healthcare stocks served as powerful painkillers during last year’s market declines. Yet the sector offers much more than just downside protection for investors who focus on business potential and resist the urge to predict scientific breakthroughs.
After MSCI decided today to boost the allocation to Chinese onshore stocks in its emerging-market indices, global investors are likely to pump more money into the market. But watch out for crowds. Flows into China are concentrated in a small group of large-cap stocks.
A generation ago, China had little influence beyond its borders. Today, its importance to the world economy rivals the United States’. China’s role in markets is growing, too: in April, it will join a major global bond index. The future may bring a freely traded Chinese yuan and a challenge to the US dollar.
As MSCI considers boosting the allocation to Chinese onshore stocks in its emerging-market indices, global investors are pumping money into the market. But watch out for crowds. Flows into China are concentrated in a small group of large-cap stocks.
The euro area faces another challenging year, but we see a continuation of recent soft growth as much more likely than recession. The European Central Bank (ECB) is, nonetheless, now likely to delay its first rate hike to 2020, and could also implement fresh credit-easing measures.
Value investing has always been about challenging the consensus—but never more so than today. After several tough years, we’re seeing signs of a value recovery brewing. Yet fresh approaches are needed to capture the potential in today’s complex markets.
The Chinese stock market is changing at breathtaking speed and is on track to reach maturity faster than any other in history. Global investors have been reluctant to dive in, but there are good reasons to get acquainted with the companies serving the world’s second-largest economy.
How swift will the high-yield recovery be? How likely is it to be sustained? History sheds some light.
Should you be concerned that high-yield bonds didn’t predict last year’s equity market selloff? We don’t think so. In fact, we think investors should consider adding high-yield exposure to reduce overall risk.
Many US companies have enjoyed an earnings boost from premium products in recent years. But a strong sales mix may leave a company’s profitability vulnerable in the late stages of an economic cycle, when spending trends begin to weaken.
Countries and companies have been on a borrowing binge even as the growth of the working-age population in many parts of the world slows. Is a prolonged period of low growth and low inflation in our future?
The government shutdown and temporary displacement of some workers didn’t cause the strong US labor market to miss a beat. Today’s jobs report reinforces that gains have been accelerating. That’s good news for the economy and markets.
Municipal bond investors like their muni portfolios to play the role of Old Faithful in their overall asset allocation, providing safety and income. But that doesn’t mean that the investment environment is reliably the same. How can muni investors stay on track in 2019? They can adhere to these three strategies.
With Brexit headlines dominating the European news, equity investors face an ongoing challenge. Building resilient portfolios requires a clear view of the long-term outlook for European companies that also reflects major short-term political uncertainties.
Africa’s two largest economies will hold elections this year, and there’s a good chance the outcomes will lead to slightly faster growth and higher asset prices. But rising populism and nationalism remain a longer-term risk.
Equities declined around the world in 2018, and valuations fell sharply. The risks are clearly significant—but have stocks fallen too far? With earnings still expected to advance this year, we think selective investors can find attractive entry points.
The US government shutdown is almost four weeks old, and there’s no sign that the standoff will be resolved anytime soon. How much has the shutdown impacted—and how much will it impact—economic growth? That depends on how long it lasts.
It’s been two years since our initial research on populism, and populist-inspired policies continue to advance today on multiple fronts. As we see it, investors should expect more of the same ahead—influencing everything from global economic growth and inflation to policies directed specifically at the corporate sector.
