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News & Research
Most Recent News & Research
Analytics | Portfolio Risk Management
The Bank of England is snapping up bonds to stabilize debt markets — but that goes against its aim of stemming inflation. Here’s what you want to know.
“The Bank of England is facing a very, very difficult dilemma right now,” Christoph Schon, Senior Director of Applied Research at Qontigo, told me on the phone from London yesterday. “The bank wants to quiet down markets and stabilize credit conditions in the UK.”
Analytics | Portfolio Risk Management
Higher interest rates will not save the pound—nor will a weaker currency prop up the UK stock market
Conventional wisdom has it that higher interest rates make a currency more attractive to foreign investors, whereas a weaker exchange rate can be good news for export-oriented economies. Neither is true for the United Kingdom right now.
Analytics | Portfolio Risk Management
Hoping for inflation to come down? Beware of what you wish for…
Our stress tests generated in Axioma Risk indicate that further rate hikes could mean even more bad news for stocks and bonds alike, even if, or rather because, they help bring down anticipated consumer-price growth.
Restoring price stability will take some time, says Fed Chair Powell. Christoph Schon examines market weakness following Powell’s commentary. He looks at movement in treasury yields FVX, TNX, and TYX. He then spotlights the energy ETF, XLE.
This year’s market volatility and macro shocks have raised a challenge to the thematic investing boom, but also offer a chance to reappraise the benefits of the investment approach. Overall, the funds continue to attract net inflows as investors seek alternatives to traditional sector-based portfolios in their search for long-term outperformance.
Term spreads have risen in multiple regions around the globe, as long-term sovereign yields soared amid rising (expected and actual) inflation but central banks took longer to raise short-term interest rates. The impact of this on international real estate has mostly been positive over the past two-and-a-half years.
The market volatility and macroeconomic disruptions of 2022 have raised a challenge to the thematic investing boom, but also offer a chance to reappraise the benefits of the investment approach.
Amid rising inflation worries and expectations of additional interest rate hikes by the Federal Reserve, U.S. Treasuries have undergone a huge sell-off in recent weeks with no signs of reduced pressure ahead — but sources said there’s still an important place for the embattled bonds in institutional portfolios
Index | Thematic Investing
Thematic investing in the current climate – A more focused approach to sustainable and future-proof investing
The Russian invasion of Ukraine spooked equity investors around the world, but losses were not distributed equally across all sectors, with some industries even exhibiting positive returns. This opens up opportunities for more focused strategies such as thematic investing.
With inflation at multi-decade highs, a tightening of monetary policy appears inevitable. Since November, a growing number of central banks — most prominently the Bank of England — have begun to raise rates, and the Federal Reserve is expected to follow suit in March.
As 2021 draws to a close, the focus inevitably shifts to the year ahead. In terms of investment opportunities, we conclude that high yield bonds offer the most promising risk-return characteristics in 2022 for all examined scenarios.
Analytics | Portfolio Risk Management
Worried about rising inflation? Buying commodity currencies could soften the blow
Despite ongoing central-bank claims that the current spike in inflation is “transitory,” the recent surge in oil prices to 7-year highs, combined with ongoing supply shortages across many industries, suggests otherwise.