Funds Management

A hurricane doesn’t cause a financial crisis, and a financial crisis doesn’t cause a hurricane – so investors are increasingly eyeing the lucrative and uncorrelated returns of the cat bond market.

Historical investment skill means managers might have better odds of outperforming in the future, according to new research from Essentia Analytics that chips away at the conventional wisdom of manager selection.

There’s been good times and bad times for the EM set, but they’ve exited Covid monetary settings well ahead of their developed market peers and their debt is back en vogue.

A second Trump presidency would see a new era of American economic protectionism, according to Allspring, sending inflation higher and global growth lower. And that’s without factoring in potential threats from China and Iran.

It’s not just FOMO. Truly innovative business models are helping push stocks higher, says Capital Group, and for some of them there’s a lot more growth to come.

While Japanese equities are back en vogue for the institutional investor set, not everybody is convinced, even as multinationals descend on the country and domestic corporates lift their governance game.

In the first half of 2022 the market fell almost as much as it did when Europe tumbled into World War Two. Then it reversed course – and famed bubble spotter Jeremy Grantham says a new artificial intelligence bubble is the cause.

War and plague have disrupted the geopolitical peace over the last three years with far-reaching consequences for international trade and economic growth.

Super funds should start looking in their own region for private debt investments, according to Muzinich and Co., but the lower-middle market in the US also presents a “once in a decade” opportunity.

The EM story of economic growth and portfolio diversification should work in theory – but what’s worked in practice has been altogether different. Still, gloom around China obscures the many bright spots in a diverse market.

Betting on mega-caps has rarely paid off for active managers, but investors who want exposure to the US market are often forced to take on massive stock specific risk for or against the Magnificent Seven. A mega-cap mean-reversion could be a tailwind once again.

The peak in interest rates and inflation has been supportive of markets, but there’s still plenty of turbulence ahead and investors should be wary of chasing stocks higher.