Institutional Investor (November 21)
“After saving $1.6 billion since implementing its high-profile Collaborative Model in 2017, the California State Teachers’ Retirement System plans to focus on even more sophisticated cost savings efforts.” It already directly “manages 85 percent of its fixed income portfolio, and 75 percent of the global equities book in-house.” Now it plans to extends its Collaborative Model to encompass more private investments while shifting “its exposure from global equity to private credit, private equity, and infrastructure.”
Tags: 2017, CalSTRS, Collaborative Model, Cost savings, Credit, Fixed income, Global equities, Implementing, In-house, Infrastructure, Portfolio, Private equity, Sophisticated
Investment Week (November 6)
“Fixed income markets are currently experiencing a rare irregularity. Short-dated bonds are trading at a higher yield than long-dated bonds, in other words, the yield curve is “inverted”. For investors in short-dated corporate bonds, this provides a unique opportunity to benefit from some of the most favourable forward looking relative return prospects and attractive valuations in recent history.”
Tags: Bonds, Fixed income, Inverted, Investors, Irregularity, Long-dated, Markets, Rare, Relative return, Short-dated, Valuations, Yield curve
Institutional Investor (May 25)
“Managers that want to run fixed-income funds with a focus on environmental, social, and governance factors face larger research challenges than those in stocks. But the massive opportunity in bonds may make the uphill battle worth it.” Compared to equities, the “patchwork of standards” increases the “risks of ESG fixed income funds.”
Tags: Bonds, Challenges, Equities, ESG, Fixed income, Funds, Managers, Opportunity, Patchwork, Research, Risks, Standards, Stocks, Uphill
Bloomberg (June 10)
“Pity Europe’s banks. For years, they have been in retreat, losing business in their own back yards to Wall Street rivals. Now the battlefront is shifting – but what looks like an opportunity to gain ground may be just the opposite…. Shackled by sluggish economic growth at home and record-low interest rates that are crushing margins, European firms have been unable to compete with U.S. rivals in trading and capital markets. Those same dynamics look set to play out again in transaction banking,” which is set to displace fixed income as the largest revenue driver by 2020.
Tags: Banks, Battlefront, Capital markets, Economic growth, Europe, Fixed income, Interest rates, Margins, Retreat, Rivals, Trading, Transaction banking, U.S., Wall Street
Institutional Investor (May 6)
Unconventional monetary policy, demographic change, economic challenge and technological disruption are impacting debt markets. “Remarkably, the pool of positively yielding debt in the global fixed-income universe has shrunk by more than $5 trillion in less than two years, which clearly presents a tremendous challenge for investors seeking income and attempting to match assets to liabilities.”
Tags: ALM, Challenge, Debt markets, Demographic change, Economic challenge, Fixed income, Monetary policy, Technological disruption, Unconventional, Yields
Euromoney (May Issue)
Trading in fixed income, currencies and commodities (FICC) is being transformed in a manner that’s benefiting investors and putting the squeeze on many big banks. “The move to electronic trading is accelerating; margins are getting tighter (no sign of oligopolistic pricing here), as competition and transparency grows, and the costs of maintaining a leading tech platform, once built, never go away.”
Tags: Banks, Commodities, Competition, Currencies, Fixed income, Investors, Margins, Oligopolistic pricing, Tech platform, Trading, Transparency
Euromoney (October Issue)
“Rates will rise as the Fed begins tapering. “Short-term interest rates will rise to 3% over the next two to three years, with the 10-year and 30-year rate likely to reach the 6% range,” according to Mike Niedermeyer of Wells Fargo Asset Management. He adds, “I think people will be surprised by the relative performance of equities over fixed income. Past decisions have forced a correlation between fixed income and equities but we could now have a return to negative correlation between fixed income and equities.”
Tags: Correlation, Equities, Fed, Fixed income, Interest rates, Niedermeyer, Performance, Tapering, Wells Fargo
