The coronavirus is a social issue that has brought unprecedented disruption to societies and is impacting the wellbeing of the world’s population. Capital markets are responding to this challenge with more than $9 billion of social bonds issued in the past three weeks, all from supranational entities. However, more can be done, and this presents a great opportunity for governments to follow suit.
In our commentary from 10 March we noted the fragility of the current financial system and its dependency on cheap debt. Our view is unchanged that, besides the virus, the primary drivers of this bear market are the credit metrics (more on that shortly).
Concerns around coronavirus have been felt in global equity markets for more than a month now. However, things escalated last week, with the steep sell-off in oil further compounding fear around the recessionary impact of the virus.
The coronavirus outbreak is extremely complex, with the fear of the virus so far seemingly greater than its actual impact. The economic consequences, however, are very real.
For the past 10 years, I have been positive about the prospects for equities.
But at the end of May, I downgraded my view to neutral as the trade war between the US and China escalated. The rhetoric between the two superpowers was becoming more hard-line, and I foresaw the risks for equities rising. It appeared to me that the Chinese had decided to take a firmer line in negotiations, reducing the chances of a deal.
Investing responsibly in real estate is complementary to our core objective of delivering strong risk-adjusted returns for clients. Here, we outline our approach to managing property assets and demonstrate how we apply these principles.
Every risk has attached to it a price. Lately the facts have evolved, mostly in a negative direction: trade wars have resurfaced, risks of an unfavourable Brexit are back in focus, and at least some corners of financial markets are firing warning signs about the future path of economic and earnings growth.
Columbia Threadneedle Investments fixed income team provide their weekly snapshot of market events.
Five years after we launched the UK’s first social impact bond fund open to both retail investors and institutions, the Threadneedle UK Social Bond Fund is growing up fast
World equity indices plunged during Q4 last year before staging a powerful recovery, regaining virtually all the ground they had lost. This extraordinary turn of events may look irrational, but it tells a coherent story about the fragility of investor confidence as we navigate the end of this economic cycle and approach the US elections in 2020.
In the space of just 12 months, markets have switched from expecting interest rate rises to expecting interest rate falls. Broadly speaking, this means 2019 should be a good year for fixed income. But investors are treading a fine line and need to differentiate between fixed income strategies
The UK’s departure from the European Union is still up in the air, despite setting a new date in October for leaving. There remains no clarity on where the country will stand in terms of a deal by the time the formal process is triggered. When the UK finally leaves, it probably faces two extremes – a hard or soft Brexit.
In the past three years we have seen the “revenge of the index” in the UK, where a market narrowly led by the large commodity stocks has made it harder for all-cap managers to keep pace. Are we now on the precipice of a reversion of this? Could there be enough attractive targets within the market that are opportunities for actively managed funds – heralding the return of activism? Richard Colwell, Head of UK Equities, discusses.