Author Archive for: Jude McDonnell

Entries by Jude McDonnell

Dark clouds hovering as bond yields spell trouble

Bonds have been unrelenting in 2019, rising in stark defiance of investors who called a fade to the rally in late 2018, when the US Fed appeared determined to hike rates. This insatiable appetite for bonds has seen yields plummet to record lows in several markets, while the quantum of negative-yielding debt is climbing ever […]

Unconstrained bonds and hidden risks

It is easy to see why the unconstrained approach is so appealing to investors. By taking a ‘benchmark agnostic’ view, an unconstrained bond manager can actively position their portfolio based on their view of the future direction of yields or relative performance between sectors. This flexibility not only allows unconstrained managers to outperform the benchmark […]

Crunch time for emerging market debt

This year has been challenging for fixed income investors across all sectors, but the extraordinary developments in emerging market currencies and yields spelled significant pain for Lonsec’s fixed income fund managers. Volatility had long been anticipated by investors but it finally reared its head in 2018 with February’s selloff, followed by a similar bout of […]

Not all income is created equal

Exchange Traded Funds (ETFs) have become a popular way for investors to gain exposure not only to passive indices but to a range of market factors. Smart beta ETFs, which follow rule-based strategies to provide factor exposure, are increasingly recommended by financial advisers because they provide a relatively cheap and effective way of meeting specific […]

Investors risk exposure to ‘glittering junk’

Investors sticking to the traditionally high quality, conservative part of global bond markets may be surprised to learn that they are more exposed to riskier credit now than prior to the GFC. Unlike high quality AAA-rated bonds, a BBB bond is only one or two downgrades away from ‘high-yield’ or ‘junk’ status. When the economy […]

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