We believe the spotlight on the burgeoning BBB credit market has diverted attention from the risks in the smaller single-A market.
Behavioral finance may help to overcome cognitive biases.
Even as the probability of a recession in the near-term remains low, we believe investors should look to sectors that are likely to be resilient in periods of higher volatility.
Following the Federal Reserve’s pivot to patience, we believe U.S. short-term interest rates are now anchored in The New Neutral. Global growth keeps synching lower, but may experience a soft landing later this year if China’s economy stabilizes and trade tensions ease.
While we are constructive on the prospects for emerging markets in the year ahead, we think the real potential lies in individual country and thematic opportunities.
Investors in UK inflation-linked bonds are facing two critical sources of structural uncertainty: Brexit-induced volatility and questions about the deeply entrenched (yet problematic) Retail Price Index (RPI
We believe short-term interest rates in the U.S. are now anchored in The New Neutral, as global growth keeps synching lower.
A brief monthly update on what's happening in the municipal bond market.
With a patchwork of lenders now willing to provide financing on noncommercial terms to countries in distress, “moral hazard plays” have proliferated in emerging markets.
Investors in UK inflation-linked bonds are facing two critical sources of structural uncertainty: volatility arising from the Brexit process, and questions about the deeply entrenched (yet problematic) Retail Price Index (RPI), to which UK “linkers” are tied.
The divergence between recent bullish factor performance and weaker economic fundamenta...
Investors globally are walking a tightrope today, balancing risk-taking and risk management. As growth appears poised to slow, the outlook for financial markets remains uncertain − a situation compounded by increased cost of capital, tighter financial conditions and heightened market volatility.
We favor Asian high yield over investment grade credits in spite of historical higher volatility since we view valuations as more attractive, particularly compared with U.S. high yield and emerging market peers.
We believe an active, flexible, multi-sector approach may offer investors better long-term results by focusing on structural opportunities to generate alpha.
In this issue, Research Affiliates assesses risks facing the All Asset strategies and shares insights from its CEO on fostering a winning corporate culture.
Over the past year, emerging market (EM) equities have been one of the most volatile segments of the global market. With news headlines dominated by the International Monetary Fund’s bailout of Argentina and Turkey’s sudden interest rate increase and currency depreciation, EM equities dramatically sold off in 2018 – down 14.6% for the year.
In recognition of International Women’s Day on 8 March, PIMCO leaders in three regions discuss their career experiences and the progress they see for women in finance and their own career experiences.
The landscape for women in finance has changed notably over the past two decades. Today, women represent 46% of financial services employees, according to a study by Mercer. This growth, however, has been predominantly at the junior level; women represent only 15% of the top ranks in finance, and the number falls even further at the CEO level...
Chinese stimulus could be instrumental in deciding which investors are proved right.
Bond investors will need to be very selective due to recent changes in sector credit quality.
Chinese stimulus could be instrumental in deciding which investors are proved right....
Impact investing is anchored in a fundamental belief that over the long term, healthy societies and healthy markets go hand-in-hand.
The decline in oil prices continues to weigh on headline Consumer Price Index (CPI) inflation, which fell 0.3 percentage point to 1.6% year-over-year in January. However, core CPI (which excludes energy and food prices) held steady at 2.2% year-over-year, with support from normalization in retail prices after holiday discounting late last year.
The European parliamentary elections may cause near-term market jitters, but we do not think the outcome will be a game-changer.
A review of last month’s market-moving events across countries and asset classes.
In this issue, Research Affiliates assesses the potential impact of a bear market in U.S. stocks on emerging markets and discusses regulatory reporting requirements.
The Federal Reserve’s recently communicated change in its outlook for monetary policy has led to concerns that the Fed is overreacting to market volatility, or worse, succumbing to political pressures. However, we believe there is a more compelling reason for the dovish shift.
Here are key takeaways from our 2019 Asset Allocation Outlook on how we are positioning asset allocation portfolios in light of our outlook for the global economy and markets.
Today’s late-cycle environment gives investors an opportunity to re-evaluate the risk and return potential of their portfolios. Since the depth of the financial crisis, core stock and bond allocations have delivered exceptional returns with modest volatility. But future returns will likely be muted even as risk increases.
Discussions and debates at this year’s World Economic Forum took a soul-searching turn with Davos organizers and delegates agonizing over the future of globalization in a world marked by nationalism, protectionism and social tensions based on economic imbalances.
Akin to the famed Stanford Marshmallow study on delayed gratification, deferral of Social Security income often maximizes lifetime benefits, particularly for those with above-average life expectancy.
We are skeptical Canada can shift its growth model, and our investment outlook for Canada is cautious as a result.
Following this week’s meeting of the Federal Open Market Committee (FOMC), the Fed issued a statement that more forcefully signaled its intention to be cautious in the face of a more uncertain outlook. Policymakers also signaled that they view the current stance of monetary policy as more or less neutral. Therefore, investors should expect the Fed to keep rates steady, for now.
In recent months China has rolled out tax cuts and incentives to boost consumption over investment while taking steps to further open its capital markets – a shift in approach that seems to accept a natural slowing in growth over time and to acknowledge the costs of an overreliance on credit growth.
We expect market volatility to continue in 2019, creating opportunities for the Income Fund.
In his first press conference of 2019, European Central Bank (ECB) President Mario Draghi said risks surrounding the eurozone growth outlook have shifted to the “downside,” versus the “broadly balanced” risks he discussed just one month ago when the bank ended net asset purchases.
While we believe the shutdown on its own would have only a modest impact on growth, the...
We are focused on identifying country-specific opportunities and carefully selecting credit positions where we see value and very low default risk.
In our view, a combination of positive macroeconomic factors is likely to keep prepayment speeds higher than the market projects.
In our outlook for 2019, we believe politics and policy out of Washington will continue to drive – and in some cases, weigh on – markets, much like they did in 2018. Investigations and manufactured crisis are likely to contribute to uncertainty. Trade tensions persist, though on a more positive note, relations between the U.S. and China seem to be improving.
With the effective fed funds rate now only slightly below the range of estimates for neutral monetary policy and few signs of economic or financial market overheating, we believe that the Federal Reserve is likely to hold rates steady in March, interrupting its pattern of quarterly interest rate hikes.
Richard Thaler and Emmanuel Roman discuss behavioral science and investing.
Tighter financial conditions and slower global growth have weakened arguments that U.S. monetary policy will be restrictive in the coming years to alleviate the risk of economic overheating or growing financial imbalances.
Five key macro debates are likely to shape the economic and market outlook for 2019.
-Global market performance remained challenged amid lingering volatility. -Concerns about softer growth, coupled with comments from the Fed, tempered market expectations for the path of future rate hikes. -An assortment of geopolitical developments continued to capture attention in November.
We believe markets are now broadly priced for an extended period of the status quo – where the current impasse remains, but the UK remains in the EU.
Recent fundamental changes in the leveraged finance markets mean that actively managing credit exposure is more important than ever.
Will the ECB have sufficient firepower – and support from the population – to spur the economy when the next recession arrives?