After a very strong start to 2019, fixed income investors face the headwinds of a low/negative rate environment, tighter spreads in credit markets and an uncertain macro backdrop. By emphasising both income generation and downside risk management, Matthew will discuss how the absolute return income approach can enhance returns for the level of risk taken while maintaining credit quality.
The RWC Diversified Returns Fund is a multi-strategy portfolio, which aims to diversify investors’ holdings by providing defensive, uncorrelated returns. The team use a credit-cycle framework to guide risk-taking. Clark will discuss how liquidity features prominently in the team’s thinking, including some unconventional ways to exploit it profitably.
Investors often invest in EMD through a tradition allocation approach with external and/or local debt. Richard will explain his belief that this framework overlooks the underlying drivers of the asset class, which includes duration, credit and currency. He will argue that an unconstrained total return approach can help actively manage these drivers while also addressing the problems of volatility and drawdowns.
Despite headlines of increasing trade tensions, long-term growth fundamentals in Asia remain strong. The investment grade corporate sector in Asia has shown improvements in leverage and debt servicing ratios over the past few years, leading to lower default rates compared to other geographies. Holger will show how Asia Credit is also supported by strong earnings growth and in an environment of declining interest rates it offers investors fertile ground in the hunt for yield.
The Chinese market is changing with thematic trends propelling China to become the world’s largest economy. While trade wars, rising debt concerns and doubts about market reforms have made the headlines, it is possible find good prospects within China’s fundamental drivers and take advantage of trends propelling this growth. Ross will outline how it is possible to create long term opportunities, avoiding the pitfalls and take advantage of this uncorrelated growth by investing in high-quality companies.
We find ourselves at a crossroad for EM assets after a strong rally despite slowing growth momentum. However, potential signs of stabilising, growth in Europe, China and Ems, coupled with a less buoyant US economy could sustain global risk appetite. Chris will share his views on the outlook for emerging market debt and the parts of the market that he is finding interesting given the market backdrop.