European high yield bonds are overpriced and offer lower returns than their US counterparts, reports Citywire Global. Lou Cohen, manager of MacKay Shields, said most of the companies in Europe are operating in materially weaker markets than the US right now. On average, he thinks US bonds offer a much better credit quality, a higher treasury base component, and a higher spread. Referencing the Nordea 1 – Unconstrained Bond fund, managed by Citywire + Dan Roberts, Cohen adds that the asset management group has been shortening two-year treasuries for the past two years.
Category: News
Six ways to rethink your derisking plan in a volatile world
Around 40 years ago we experienced the 1970s oil shock, with rising oil prices, rising inflation and rising interest rates. Recently, the opposite has been true: oil prices fell by almost 50 per cent in 2014, inflation is falling and, particularly in Europe, low inflation is adding to growing fear of deflation taking hold. These market movements have had serious consequences for pension funds’ funding levels. Rob Gardner, co-CEO at consultancy Redington, presents six ways to rethink your pension fund investment and derisking strategy in an uncertain global market.
High Yield Bonds Commentary: Happy to be bullish contrarians
Although people have been bullish on high-yield over the past few years, that sentiment has turned. Louis Cohen – senior managing director of Mackay Shields, which manages five fixed-income UCITs funds on behalf of Nordea Asset Management – would rather be contrarian. He contends that the market has been through numerous cycles, with many periods of market noise in between. While there remain some key risks in the market – such as the marginal risk that Europe starts to unwind – he is confident that the fundamental story for high yield is intact.
What Financial Education Do Your Children Need?
The Government has introduced financial education into the syllabus for children – but what can we be doing as individuals to make sure we are prepared for the future? Emma Wall interviews Freddie Ewer, Co-Founder of RedSTART, about financial education and the challenges it faces on the Morningstar series “Ask the Expert.”
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IW – Spotlight on: Care home operating funds
Oliver Harris, manager of the Montreux Care Home fund, explains why the relatively unknown sector of care home operating funds should be a key income play for investors
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The most consistent Europe ex UK equity manager revealed
The question of UK involvement in Europe looks set to be a hot topic when the country goes to the polls in May. While London-listed firms have proven popular for many European equity investors, there are a considerable number who wish to focus efforts elsewhere. 108 fund managers currently operate in the Equity Europe Excluding UK sector; of these, 74 can attest to a five-year track record. Citywire Global profiles lone outperformer Dean Tenerelli, manager of the T Rowe European Ex-UK Equity Fund, who has beaten the performance of his average peer in each individual year – regardless of what the wider market has thrown at him.
Redington: Standing firm in the company of giants
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IPE Views: Is there an alternative to alternatives?
In a world of investments dominated by equities and bonds, the category of “alternatives” offers great allure to portfolio investors seeking attractive returns and potentially both diversification and downside protection. It is a catchall label to help investors quickly categorise the universe of opportunities. However, the term also purveys a sense of mystery, additional complexity and high fees. Such a broad label can leave many thinking too myopically about the opportunities available to them. Urging investors against considering an alternative to this catchall label, Pete Drewienkiewicz clarifies what exactly “alternatives” mean.
ECB sows the seeds for better eurozone growth
The European Central Bank recently delivered a significant expansion to its wuantitative easing program. Worth a total size of about €1.1 trillion, the expansion was much more aggressive than markets anticipated and sets the stage for a eurozone recovery in the second half of 2015. T Rowe Price’s portfolio manager for European Fixed Income, Ken Orchard, provides his latest thoughts on the ECB’s announcement and the outlook for the eurozone economy.
Growth in China has slowed but will the Year of the Sheep deliver for investors? We get some fund tips
While China used to be the go-to emerging market for investors looking for a decent return, concerns about a hard landing have driven many away in recent years. However, as China enters the Year of the Sheep – a year that has traditionally brought in strong returns for investors – Darius McDermott of FundCalibre contends that China’s long-term growth prospects remain as strong as ever and tips the Hermes Asia ex Japan fund.