Fixed Income – Page 13
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FeaturesIPE Quest Expectations Indicator: September 2023
US officials are talking up the Ukrainian advance towards Melitopol, a sign that all is not well. Contrary to expectations, the biggest problem is not the Russian air force, but land mines. Trump’s legal problems are as worrisome as his inexplicable lead among Republicans. US abstinence in the struggle against climate change is a potential cause for a major trade war as the EU realises it must expand its regulations on importing ‘dirty’ products to prevent a free rider problem undermining its climate efforts. In the UK, Labour’s lead over the Conservatives remains crushing, making it difficult to claim the government has a popular mandate.
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FeaturesFixed income, rates & currency: Uncertainty persists
As the major central banks in developed markets reach, or at least near, the end of their hiking cycles, markets, rather than identifying when policy rates will peak, focus is now on the conundrum of just how long these policy peaks will be maintained.
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NewsIlliquids balance blamed, as ATP loses most of Q1 gains
‘Always thinking about alternatives-liquids balance’, says Danish statutory pension fund CEO on asset mix of geared investment portfolio
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NewsDACH roundup: German portfolio managers lose ground
Plus: Swiss scheme to increase bond investments; BaFin strips asset management licence fom Adrealis; German pension dashboard adds three providers
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NewsVarma trounced by rival Ilmarinen in first half
Finnish pensions heavyweight reports 2.6% return in first half
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NewsBASF Pensionskasse tweaks allocation, increasing bonds and private equity
The scheme made new investments in its three bond funds totalling €438m
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NewsAP1 nudges equities allocation, duration higher in first half
Swedish national pension fund produces 6.6% January-June investment return despite 7% loss on property holdings
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NewsGermany’s BVV to boost bond investments
The pension fund is also planning to slightly increase allocations to infrastructure by 0.7% this year
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NewsGermany’s KENFO plans slight increase in illiquid assets
The fund took tactical measures to cushion losses in 2022 that stood at the end of the year at -12.2%
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NewsNordic roundup: Industriens posts 3.3% in H1, Sampension sees weaker H2
Sampension CIO says second half of 2023 could well be weaker than the first, as market positivity overblown
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NewsSovereign investors reshape portfolios after year of negative returns
Sovereign investors are now more resolute than ever in their ambitions to fund the energy transition
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NewsBayer Pensionskasse prioritises fixed income high credit rating allocation
Following an ALM study last autumn, the scheme has adjusted its strategic asset allocation
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NewsGerman doctors’ pension scheme builds up directly-held bond portfolio
The pension fund recorded positive returns of 3.3% last year on assets invested, despite losses in bond and equity markets
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Country ReportCountry report – Pensions in Italy (July/August 2023)
Italian second-pillar occupational pension funds continue on their path to diversification. Owing to the higher yields on offer in traditional fixed income markets, allocations to private markets may slow down temporarily, but funds have made long-term strategic commitments. A variety of industry initiatives is facilitating investment in private equity, private debt and infrastructure. Meanwhile, some pension funds are consolidating their private markets portfolios.
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FeaturesIPE Quest Expectations Indicator: July 2023
The war in Ukraine is starting to look like a stalemate. This would be in Russia’s favour. Delivery to Ukraine of more of the tanks promised or fighters to contest Russian air control might lead to a breakthrough, but is unlikely to happen in the summer. In the US, Trump looks like a leading but weak candidate for the Republicans, even against a Democrat as unpopular as Biden. Legal pushbacks against the fight to prevent permanent climate change, notably in Texas, have the potential to cause a trade war with the EU. They illustrate how European and North American values are slowly drifting apart.
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FeaturesIPE Quest Expectations Indicator: August 2023
Politics is on hold until September. Normally, markets do not care and analysts reduce their activity. A political crisis in the Netherlands shows the danger. There are warnings from all sides that climate measures are ever more urgently needed. Markets need a clearer view of which products govern- ments will support with market-shaping measures and when, especially in the face of a faltering pace towards climate goals. Early signs of problems include a lack of capital for innovative start-ups and the increasingly loud voices of climate change deniers.
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Country ReportItaly: Private markets allocations at a crossroads
Italian pensions funds are showing renewed interest in fixed income, as investment in private markets slows down – but long-term commitments are still in place
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Asset Class ReportsFixed income & credit – No turning back for alternative credit
Investor demand for alternative lending strategies remains strong as the opportunity set grows
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FeaturesFixed income, rates & currency: US debt crisis averted – what next?
The US debt ceiling crisis was resolved in June, avoiding potentially major fireworks, with a suspension of the limit until early 2025. This ensures that the next time the politicians have to fight about it will be after the November 2024 presidential election. Although markets were relieved at the temporary resolution, the process of rebuilding the very depleted Treasury cash balances – with some huge bill auctions planned – will drain significant liquidity from the system, which could put pressure on the rates market.
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Asset Class ReportsFixed income & credit – Resilience bonds
Resilience bonds aim to encourage climate investment characterised by a more forward-thinking, preventative outlook
