Connections: Investment Matters: Recent Episodes
Janus Henderson Investors
Investment Matters connects you with the investment themes shaping our world. Featuring insights from our investment teams on key economic and market drivers, this channel explains the risks and opportunities uncovered by our research and highlights the implications for investors.
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In this episode, Portfolio Manager Denny Fish takes a deep dive into the current state of artificial intelligence (AI), including the latest advancements, its potential to propel economic growth, and the rise of agentic AI and its impact on software business models. He also shares insights from a recent research trip in China.
Portfolio Managers John Kerschner and Nick Childs discuss the asset-backed securities (ABS) market, identifying key risks and opportunities for investors seeking to navigate the evolving fixed income landscape.
In the latest episode, our Research Team sector leads Noah Barrett and John Jordan discuss their outlooks for energy and financials and explore how interest rates, AI, and evolving policy dynamics are shaping opportunities across their sectors.
Portfolio Managers John Lloyd and Brent Olson share their outlook for fixed income markets in 2026 and discuss why active management, fundamental research, and selectivity across sectors are key to identifying opportunities while managing volatility.
Brendan Carroll, Co-Founder and Senior Partner at Victory Park Capital, challenges the notion of a private credit bubble, revealing why asset-backed lending – with its tangible collateral and robust risk controls – offers transparency and resilience in today’s evolving market.
Discover the factors reshaping consumer behaviour as Michelle Dunstan and her team at Janus Henderson explore emerging trends in health, wellness, and technology, alongside the economic impact of GLP-1 inhibitors and ultra-processed foods. Learn how these dynamics influence market valuations and investment strategies.
In this discussion, Janus Henderson's investment experts delve into the market outlook for 2026, exploring AI's role in economic growth, the implications of a K-shaped economy, and strategies for navigating the higher cost of capital.
In this episode, Portfolio Manager Jeremiah Buckley and Head of U.S. Fixed Income Greg Wilensky discuss AI’s broad influence on equity markets, where they see opportunities in fixed income, and how they integrate both asset classes to navigate periods of economic transformation.
Portfolio Managers Jonathon Coleman and Brian Demain discuss opportunities in small- and mid-cap stocks amid narrow market leadership. They also analyze how AI adoption, reshoring trends, and M&A activity could create long-duration growth tailwinds for smaller domestic firms.
Portfolio Managers John Kerschner and John Lloyd discuss how the economic outlook is shaping their investment approach and why active management is critical to navigating complexity in today’s fixed income markets.
In this episode, MJ Lytle, Head of Product Innovation, and Stefan Garcia, Head of EMEA Specialist Sales, delve into the active ETF market, examining how ETFs differ from traditional solutions, as well as the strategic advantages and challenges they present to investors.
In this episode, Lara Castleton discusses the evolving role of Real Estate Investment Trusts (REITs) with Portfolio Managers Greg Kuhl and Danny Greenberger. The conversation covers how REITs, despite recent struggles, present a compelling diversification opportunity amid economic uncertainty and potential interest rate shifts.
In this episode, Portfolio Manager Robert Schramm-Fuchs explore how structural reforms in Europe are reshaping the landscape for investors, across sectors and industries.
Stock prices follow earnings growth, and for years the largest companies outpaced the rest. But as these companies’ earnings growth converges with the rest of the market and valuations potentially peak, Portfolio Manager and Equity Research Analyst Brian Recht examines where tomorrow’s leaders may emerge.
In this episode, Portfolio Manager Denny Fish discusses how the continued evolution and implementation of artificial intelligence (AI) is impacting companies, tech investors, and the global economy.
In this episode, Healthcare Research Analyst Luyi Guo shares her perspective on proposed pharmaceutical tariffs and drug pricing reform, including how they might spur innovation over the long run.
In this episode, Head of Global Short Duration and Liquidity Daniel Siluk and Portfolio Manager Addison Maier discuss how the front end of the yield curve may be well positioned to provide additional carry over cash and capital appreciation while limiting interest rate exposure amid tariff uncertainty.
In this episode, Senior Investment Manager Tal Lomnitzer and Chief Responsibility Officer Michelle Dunstan explore the critical role of natural resources and how integration of financially-material Environmental, Social and Governance (ESG) factors is essential for mining companies as they navigate the complexities of geopolitical and environmental challenges.
Portfolio Managers Ben Wallace and Luke Newman explore the complexities of long-short equity strategies, focusing on market rationality and risk management to achieve absolute returns.
How policy changes might prove to be the catalyst for a switch in global equity leadership. Portfolio Managers Julian McManus and Chris O’Malley explore whether this year’s outperformance by ex U.S. stocks can continue and the implications for investors.
In this episode, Portfolio Manager Jeremiah Buckley and Head of U.S. Fixed Income Greg Wilensky discuss how they are navigating tariff-driven volatility and why cross-team coordination is crucial to uncovering relative value opportunities in equity and fixed income.
With large capital reserves, an improving regulatory backdrop, and positive growth trends, many financial firms look prepared to withstand a potential recession.
In this episode, Portfolio Manager John Jordan and Research Analyst Andrew Manguart share what they’re hearing from banks about the volatile macro backdrop, and why they believe the sector is well positioned even if growth slows.
Is ESG dead? Far from it – but misconceptions abound.
In this episode, Michelle Dunstan, Chief Responsibility Officer, and Aaron Scully, Portfolio Manager, address ESG misconceptions and explain how integrating material ESG factors can enhance long-term
In this episode, Portfolio Manager John Lloyd discusses the most pressing issues facing fixed income investors today, with a focus on rates, spreads, volatility, and the Federal Reserve.
New GLP-1 weight-loss drugs have already hit $50 billion in annual sales – and look to have plenty of room to grow.
Portfolio Manager Dan Lyons joins this episode of Global Perspectives to provide an update on popular GLP-1 weight-loss therapies and discuss whether sales of the drugs can continue to grow and the impact on the overall healthcare sector.
In this episode, Director of Research Chris Benway explains how his team’s sector specialists conduct deep fundamental research to identify potential winners and laggards in an environment where stock market dispersion is increasing.
Portfolio Manager and Equity Research Analyst Brian Recht discusses transformational themes, with a focus on cloud computing and digitization, that he believes will drive future economic growth and provide long-term investment opportunities.
Luke Newman, Kareena Moledina and Richard Clode join Matthew Bullock to delve into the prospects for active equities and fixed income strategies in the year ahead.
Interest rates, deregulation, and election outcomes could lead to new sector winners and losers.
Portfolio Managers Josh Cummings and John Jordan explain why even as the outlook for earnings growth is strong for 2025, uncertainty around government policy, as well as the evolution of AI and rate moves, argue for a bottom-up approach to investing.
In this episode, our experts discuss the integration of ESG into investment strategies, the importance of data, and responsible AI.
A discussion of current opportunities in equities and fixed income, and why a flexible asset allocation approach might prove valuable in today’s complex market landscape.
In this episode, Portfolio Manager Jeremiah Buckley, CFA, and Head of U.S. Fixed Income Greg Wilensky, CFA, discuss economic uncertainties to monitor, the impact of the Federal Reserve’s (Fed) rate-cutting cycle, artificial intelligence’s (AI) productivity boost, and the latest fundamental opportunities in both equities and fixed income. They also weigh in on why a flexible asset allocation approach might prove valuable in today’s complex markets.
A discussion on how the macroeconomic environment is impacting the securitized and multi-sector credit markets.
In this episode, Portfolio Managers John Kerschner and John Lloyd join U.S. Head of Portfolio Construction and Strategy Lara Castleton for a discussion on how the macroeconomic environment is impacting the securitized and multi-sector credit markets.
Portfolio Managers Alison Porter and Richard Clode join Matthew Bullock, EMEA Head of Portfolio Construction and Strategy, to discuss the implications for the technology sector in terms of demographic differences, geopolitical factors, and why patience is a key virtue when investing in an emerging tech wave like AI.
Portfolio Manager Jason Brooks and Pat Brophy, Portfolio Manager at Forum Capital Advisors join Lara Castleton, U.S. Head of Portfolio Construction and Strategy, to discuss the current landscape in commercial real estate and emerging opportunities for investors in both private and public commercial real estate-backed debt.
European equities Portfolio Manager Tom O’Hara joins Matthew Bullock, EMEA Head of Portfolio Construction and Strategy, to discuss the prospects for European equities – and how companies in the region are starting to benefit from large-scale Artificial Intelligence (AI) investment.
Portfolio Managers Jonathan Coleman and Justin Tugman discuss macroeconomic, valuation, and cyclical factors driving momentum in small cap. They share insights on the economic outlook and key themes to watch in both growth and value investing.
Portfolio Managers Julian McManus and Christopher O’Malley join Lara Castleton, U.S. Head of Portfolio Construction and Strategy, to discuss their outlook for non-U.S. equities, pointing out that valuations, elevated interest rates, and artificial intelligence (AI) are among many tailwinds for the asset class.
Note: This episode was recorded at the end of July, before the market pullback on August 5. However, the views shared during the discussion have not changed.
Janus Henderson’s asset class heads discuss their outlook for the second half of 2024 in a panel discussion from our recent Global Investment Summit. Jim Cielinski, Global Head of Fixed Income, joins Lucas Klein, Head of EMEA and Asia Pacific Equities and Marc Pinto, Head of Americas Equities in a session hosted by Matthew Bullock, EMEA Head of Portfolio Construction and Strategy.
Portfolio Manager Brian Demain discusses diverse growth drivers in mid-cap stocks, including opportunities tied to artificial intelligence (AI), electrification, and healthcare. Further, he advocates for a selective approach given wide valuation dispersion, the higher cost of capital environment, and hidden risks such as stock-based compensation.
Head of U.S. Securitized Products John Kerschner and Portfolio Manager Nick Childs discuss how the current interest rate environment impacts the securitized market and why active management is key to identifying the best opportunities for risk-adjusted yield.
In this episode, Portfolio Manager Daniel Graña explains why emerging market stocks could close the performance gap with developed market peers, making now a potentially good time to consider the overlooked asset class.
How healthcare’s small- and mid-cap companies could benefit from one of today’s key macroeconomic growth drivers: aging populations.
In a follow-up discussion to a recent paper , Portfolio Managers Andy Acker, Jonathan Coleman, and Brian Demain explore how aging populations are helping to spur innovation in healthcare – and creating growth opportunities for investors.
2024 Energy Outlook: In this episode, Research Analyst Noah Barrett explains the major trends that could shape the energy sector in the year ahead.
2024 Financials Outlook: In this episode, Research Analyst and Portfolio Manager John Jordan shares where he sees the best risk/reward trade-offs in the financials sector.
2024 Consumer Outlook: Research Analyst Josh Cummings explains which companies could be best positioned to benefit as consumer spending remains robust but the macroeconomic outlook grows more uncertain.
2024 Tech Outlook: Portfolio Managers Denny Fish and Jon Cofsky explain what’s next for artificial intelligence (AI) and other trends that could impact the technology sector in the year ahead.
Industrials Outlook 2024: Associate Director of Research Chris Benway says new secular growth drivers could help offset any cyclical slowdown in industrials.
2024 Healthcare Outlook: Portfolio Manager Andy Acker explains why, after underperforming in 2023, the healthcare sector could be well positioned for the year ahead.
Will global markets remain conflicted in 2024? What will the chain reactions be as rates, inflation, employment, growth, and geopolitics converge? (Recorded 12/6/23)
Guy Barnard, Co-Head of Global Property Equities, and Matt Bullock, EMEA Head of Portfolio Construction and Strategy, review how listed property has fared this year and explain why 2024 may be a more favourable backdrop for the sector.
Research Analysts Andrew Manguart and Ian McDonald join as guests to explain the reasons for accelerating premiums in home, auto, and commercial lines of insurance and why these trends could extend the industry’s recent gains.
Portfolio Manager Denny Fish discusses the implications of higher rates and a potential recession on the tech sector and how he sees mega-themes such as artificial intelligence (AI) and cloud computing evolving in the years ahead.
Can traditional media survive in the age of streaming? The answer may provide valuable insights for what investors should consider amid technological change.
Research Analyst Divyaunsh Divatia takes listeners through the ups and downs of the streaming revolution and explains what it might take for the media industry to come through this period of technological disruption.
Portfolio Managers John Kerschner and Nick Childs discuss the securitized subset of the fixed income market and where they see opportunities for investors to diversify their portfolios and uncover income opportunities.
Research Analyst and Consumer Sector Team Lead Josh Cummings joins as a guest to discuss how higher interest rates and a cooling labor market might impact consumer spending.
In this episode, Portfolio Managers Andy Acker and Dan Lyons explain how the healthcare sector has evolved since the heady days of the pandemic and what role the sector can play in investment portfolios today.
Richard Clode, Portfolio Manager, joins Matthew Bullock, EMEA Head of Portfolio Construction and Strategy, to discuss thematic investing. They cover the importance of thematics, their take on the do’s and don’ts for investors, key technology themes, and portfolio construction considerations.
In this episode, Portfolio Manager Jeremiah Buckley, CFA, and Head of U.S. Fixed Income Greg Wilensky, CFA, discuss current opportunities in equity and fixed income markets. They also weigh in on why careful security selection, a flexible asset allocation, and managing risk at an aggregate level are key for multi-asset portfolios in today’s markets.
In this episode, Luyi Guo, a Research Analyst on the Healthcare Sector Team, explains how new weight-loss drugs could become one of the largest and most consequential drug categories in history.
In this episode, Luyi Guo, a Research Analyst on the Healthcare Sector Team, explains how new weight-loss drugs could become one of the largest and most consequential drug categories in history.
Co-Heads of Global Bonds, Jenna Barnard and John Pattullo discuss policy lags and why they believe the market is too pessimistic on inflation improvement but too optimistic on the growth environment.
In this episode, Portfolio Manager Denny Fish and Research Analyst Shaon Baqui explain why artificial intelligence (AI) is driving big returns for some tech stocks, and what investors should consider as the technology continues to evolve.
Portfolio Managers Jonathan Coleman and Justin Tugman discuss the market and economic factors they believe could portend an extended run of small-cap leadership.
In this episode of Research in Action, Ash Alankar, Head of Global Asset Allocation, says the options market shows few signs of stress, with potentially important implications for investment portfolios.
As structural shifts in the economy work to keep upward pressure on inflation, investors may want to consider a more global approach to equity investing, say George Maris, Head of Equities – Americas, and Julian McManus, Portfolio Manager.
The electrification of the global economy hinges on the ability to make batteries more powerful and lower cost. Which companies succeed in reaching those goals could have significant implications for the industry and the broader economy, says Associate Analyst Jacob Thayer.
Public real estate investment trusts (REITs) have limited exposure to the types of commercial real estate most affected by the recent banking crisis. In fact, with low levels of debt and multiple ways to access capital, some public REITs could capitalize on today’s tighter lending environment, says Portfolio Manager Greg Kuhl.
Adam Hetts, Lara Reinhard, and Mario Aguilar from the Portfolio Construction and Strategy (PCS) group cover key themes from the team’s latest Trends and Opportunities outlook and discuss the biggest trends they are seeing in client portfolio consultations.
A wave of innovative therapies is beginning to hit the market, transforming the prospects of the biotech firms behind the science, say Portfolio Manager Andy Acker and Research Analyst Vish Sridharan.
Portfolio Manager and Research Analyst John Jordan says rising interest rates, large capital reserves, and secular tailwinds are helping to bolster the financials sector despite an uncertain economic outlook.
Steve Cain and David Elms from the Diversified Alternatives team join Adam Hetts, Global Head of Portfolio Construction and Strategy, to discuss liquid alternatives at a time when investors are re-evaluating more traditional portfolio allocation philosophies.
In a special episode of Global Perspectives, Janus Henderson’s asset class experts share their perspectives on the economic outlook and discuss the risks and opportunities facing investors in the year ahead. Global Head of Portfolio Construction and Strategy Adam Hetts moderates the discussion with Jim Cielinski, Global Head of Fixed Income, and Portfolio Managers Jeremiah Buckley and Steve Cain.
Portfolio Managers Daniel Graña and Matthew Culley discuss the role of innovation as a key force driving growth in emerging markets (EM) over the next decade and explain how ESG investing in EM differs from developed markets.
Co-Heads of Global Bonds, Jenna Barnard and John Pattullo discuss how conditions are in place for bonds to deliver potentially strong returns in 2023 as the market registers the collapse in inflation and central banks retreat.
Paul O’Connor, Head of the UK-based Multi-Asset Team, Adam Hetts, Global Head of Portfolio Construction and Strategy, and Matt Peron, Director of Research, share their views on inflation, the current rate-hike cycle, and the implications for investor portfolios in 2023.
Associate Analyst Caroline Escobar joins Director of Research Matt Peron in a discussion about how macro headwinds are weighing on retailers’ valuations. But finding the best value may require a long-term perspective.
The Portfolio Construction and Strategy (PCS) team discusses key insights from their latest Trends and Opportunities report, entitled “Shock Therapy.” Global Head of PCS Adam Hetts moderates the conversation with two of the team’s Senior Portfolio Strategists, Lara Reinhard, and Sabrina Geppert.
Portfolio Managers Dan Siluk and Jason England discuss how investors can navigate the short-duration opportunity set within fixed income now that bond yields have returned to attractive levels.
The semiconductor industry has swung from supply shortages to an inventory glut, creating volatility for the stocks. Research Analyst Shaon Baqui offers perspective, saying investors may have to put up with volatility in the near term but that long-term growth drivers and industry rationalization are shaping an attractive future for semis.
Consumers face a complex environment, from rising interest rates to pent-up demand. Even so, Research Analyst Josh Cummings, who leads the Consumer Sector Research Team, says U.S. households remain resilient while at the same time many companies have taken steps to improve operations and facilitate growth.
Consumers face a complex environment, from rising interest rates to pent-up demand. Even so, Research Analyst Josh Cummings, who leads the Consumer Sector Research Team, says U.S. households remain resilient while at the same time many companies have taken steps to improve operations and facilitate growth.
Portfolio Managers Greg Wilensky and Jeremiah Buckley join Adam Hetts, Global Head of Portfolio Construction and Strategy, to provide timely updates on both the US bond and equity markets, as well as some silver linings hidden in a turbulent year for both asset classes.
A diversified portfolio of 60% stocks and 40% bonds has not provided the buffer it normally does against market volatility in 2022. But that’s not a reason to give up on markets, says Adam Hetts, Global Head of Portfolio Construction and Strategy. In this discussion, he explains ways to help fortify investment portfolios for the current environment and why it’s so important to stay invested.
Portfolio Manager Nick Childs and Securitized Products Analyst Tom Polus discuss the reasons why they believe mortgage-backed securities have been sold off disproportionately, and if that might be a good thing going forward.
Even as biopharmaceutical firms continue to deliver exciting medical advances, the sector’s performance has been mixed this year, with some firms negatively impacted by rising rates, clinical trial setbacks and regulatory uncertainty and others benefiting from strong free cash flows. Portfolio Manager Dan Lyons and Research Analyst Luyi Guo explain how investors might gain exposure to the sector’s secular growth opportunities, while minimizing downside risks.
With demand for electric vehicles (EVs) rising exponentially, the next big hurdle for the nascent industry is supply. Research Analyst Chris Benway says investors should stay focused on finding companies that can rise to the challenge.
Head of Global Sustainable Equities Hamish Chamberlayne and Portfolio Manager Aaron Scully join Adam Hetts, Global Head of Portfolio Construction and Strategy. In this podcast they discuss key ESG factors influencing sustainable investing, including Russia, energy price inflation and the rotation away from growth equities, alongside the longer-term structural opportunities generated during current market volatility.
On this episode of Research in Action, Director of Research Matt Peron is joined by Research Analyst Chris O’Malley to discuss rising commodity prices. The Russia/Ukraine crisis has been a major driver of price spikes in recent months, but for some commodities, such as copper, structural dynamics could keep prices elevated for longer and drive revenue growth. Investors who are underweight the sector should take note.
Portfolio managers Seth Meyer and Tom Ross join Adam Hetts, Global Head of Portfolio Construction and Strategy to discuss the prospects for the global economy and why relatively robust fundamentals among high yield borrowers offers grounds for optimism given that markets have already priced in a lot of the inflation concerns.
In this episode of Research in Action, Portfolio Manager Denny Fish makes the case for why investors shouldn’t let tech’s recent pullback overshadow the long-term growth potential of powerful mega themes, including the cloud, Internet of Things, artificial intelligence (AI) and edge computing.
Portfolio managers Guy Barnard and Greg Kuhl join Adam Hetts, Global Head of Portfolio Construction and Strategy to discuss REITs’ performance to-date and the impact of stagflation concerns, rising rates, and higher energy and other input costs on the sector.
In this episode of Research in Action, Research Analyst Noah Barrett explains what’s behind the recent rally in energy stocks and why he thinks supply/demand dynamics for crude in the post-pandemic economy will likely be supportive of the sector.
Portfolio Managers Nick Childs and Jessica Shill discuss why collateralized loan obligations (CLOs) deserve a closer look in today’s environment given their low interest rate sensitivity, attractive yields and diversification benefits. Key Takeaways: The current mix of low yields, high inflation and rising interest rates should prompt investors to be more thoughtful about how – not if – they should take bond exposure. Floating-rate securities such as CLOs can help diversify a portfolio of government and corporate bonds while offering competitive yields and lower sensitivity to rising rates. Although the CLO market has become accessible to a wider range of investors in recent years, we believe a rigorous due diligence process remains a critical component of investing in the asset class.
Jenna Barnard and John Pattullo, Co-Heads of Strategic Fixed Income, join Adam Hetts, Global Head of Portfolio Construction and Strategy, in the latest episode of Global Perspectives, discussing all matters bond yields, central bank policies and the economy.
FinTech is undergoing rapid change and as it does, the intensity of disruption is growing. In this episode of Research in Action, Ian McDonald, a research analyst who covers the industry, joins Director of Research Matt Peron in a discussion about FinTech’s evolution and what it could mean for the future of financial services. Key Takeaways: FinTech as an industry is evolving quickly, with dramatic consequences for the distribution of financial services. Initially, this change was marked by the shift from analog to digital (e.g., the bank branch becomes an app). But now, disruption has become more systemic, with new non-bank players threatening to displace incumbents. In this dynamic environment, investors should consider a new framework for valuing financial services companies – one in which payments and software merge – and be prepared for even more disruption and potential growth opportunities in the coming years.
The series, Plan Talk with Ben Rizzuto has moved and can now be found here:
https://plan-talk-with-ben-rizzuto.captivate.fm/listen
On Plan Talk, host Ben Rizzuto connects you with timely insights on the latest defined contribution retirement strategies. Exploring top trends and considerations for plan sponsors and participants, Plan Talk keeps you at the forefront of developments in the DC marketplace and offers perspective on what they mean for you and your practice.
Adam Hetts, Global Head of Portfolio Construction and Strategy, speaks with Portfolio Manager Nick Schommer about how an independent mindset has shaped his investment approach through a volatile ‒ and unique ‒ COVID environment. Key Takeaways: Each economic crisis presents different challenges, and the COVID investment environment ‒ marked by aggressive stimulus and consumer strength ‒ has certainly been unique. A favorable monetary and fiscal backdrop, along with ongoing bouts of volatility, have created value in some unexpected areas of the market thus far. As we enter the next phase of recovery, we believe opportunity may be found in identifying companies with pricing power that can grow earnings and cash flow in an environment where we are likely to see structurally higher inflation.
Inflation, rising interest rates and coronavirus variants could create volatility in financial markets heading into 2022. But in this episode of Research in Action, Director of Research Matt Peron explains why economic growth could still continue in the new year and what that means for equity investors. Key Takeaways As the global economy continues its post-pandemic recovery, above-average inflation, changes to monetary policy and a number of other variables could combine to create volatility for equity markets in the first half of 2022. But we think this volatility will reflect a transition to the mid-part of the economic cycle rather than the end, with more sectors potentially participating in market gains. In addition, the shift from growth-at-any-price to growth-at-a-reasonable-price could finally gain traction in markets, benefiting a broader set of stocks.
Technology plays a pivotal role in the transition towards a more sustainable world and is a deflationary force. This episode explores these themes and the investment opportunities. Key takeaways: Technology is providing solutions to major environmental and social challenges, and as a consequence, providing attractive long-term growth opportunities. Tech innovation is inherently a deflationary force, alleviating labour, natural resources and other supply shortages by improving efficiency and productivity. Permeating every aspect of our lives, technology is a truly broad sector, offering an opportunity set going beyond the standard classifications of a tech company.
In a new series from Janus Henderson, Research in Action, Director of Research Matt Peron explains the magnitude of the energy transition now taking place in the economy and what investors should consider as the switch to renewables unfolds. Key Takeaways: In the U.S., the shift to renewable energy could require as much as $1 trillion in spending per year, with implications for almost every area of the economy. While that level of spending may not be feasible, significant investment is occurring in select technologies that will be key to moving the transition forward, such as battery technology. Diversification can help manage downside risk as technologies emerge. A pragmatic approach to investment timelines is also important. Real-world constraints, for example, could create near-term volatility for long-term investment opportunities.
In the latest episode of Global Perspectives, Head of Global Sustainable Equities Hamish Chamberlayne and Portfolio Manager Aaron Scully join Adam Hetts, Global Head of Portfolio Construction and Strategy. The trio dig deeper into sustainable investing, discussing how ESG analysis is more than just a "score" and how sustainable investing truly impacts the risk and return of all investors’ portfolios. Key Takeaways: ESG analysis should consider the physical and transition risks associated with climate change. Transition risk is the risk that a company’s business model will not adapt to the move toward a green and clean economy. Meanwhile, the physical risks of climate change go beyond hurricanes and floods and should consider where a company’s assets are located and what this means for its business. There are many examples of technology driving productivity and being deflationary. In many cases, renewable energy is cheaper than traditional thermal generation for electricity. We expect the price of renewable energy to continue to come down and the adoption of renewal energy to increase, which should be deflationary over time. We are standing at the beginning of what appears to be a transformational decade with an expected acceleration in investment and deployment of clean technologies across multiple sectors and industries. We believe that transformations can be driven by decarbonization.
Jenna Barnard and John Pattullo, Co-Heads of Strategic Fixed Income, join Adam Hetts, Global Head of Portfolio Construction and Strategy, to talk through their views on bond markets. They explain why they think bond yields have behaved logically throughout the year and why they disagree with the pervasive linear thinking of higher bond yields ahead. Bond markets are signaling where interest rates are heading but people seem to be oblivious to the message. Key Takeaways Bond yields in 2021 have behaved logically, reacting to the rate of change in economic data. As such, the peak in sovereign bond yields (in March/April) coincided with the peak in acceleration in the rate of economic growth. Yields have since declined with the deceleration in the rate of change of economic data and not, as the media would put it, because of short covering or the Delta variant. A clue to the bond market’s thinking on the long-term outlook for rates came after the U.S. Federal Reserve announced two rate hikes in 2023; the yield curve flattened as it would at the end of a hiking cycle, signaling a lower long-term neutral rate of interest. Next spring/summer will prove interesting for the bond investor. This is because we expect to see a reverse base effect – i.e., the base effects that drove inflation up this year will be very hard to beat next year, and we expect to see the first signs of what the structural outlook will be in terms of inflation. We are open‑minded to potential new lows in bond yields occurring next year.
Real Estate Investment Trusts (REITs) have staged a strong recovery since their pandemic lows. In this episode, Adam Hetts, Global Head of Portfolio Construction and Strategy, is joined by Global Property Equities Portfolio Managers Guy Barnard and Greg Kuhl to discuss the benefits offered by the asset class amid rising inflation expectations, and why an active approach is warranted in a dynamic sector with attractive growth potential. Key Takeaways Real estate fundamentals are strong, especially for those property types with pricing power and that are less impacted by the pandemic. Historically, a positive relationship has existed between inflation and REITs, thanks to leases that typically have a built-in inflation uplift, boosting income. REITs are entering a new era, with improving operational sophistication, better access to capital and more focus on sustainability, which should help drive investor returns.
Join Adam Hetts as he speaks to Jim Cielinski, Global Head of Fixed Income, about the direction of inflation and some of the potential pitfalls in traditional “inflation protection” tools. Key takeaways Base effects are distorting inflation figures; a permanent rise in inflation likely requires a closing of the output gap and momentum in wage inflation. Treasury Inflation Protected Securities and floating rate securities may solve one type of risk but can open up investors to other under-appreciated risks; what’s more investors are not absolved of the need to avoid overpaying. The world may be less synchronized exiting the pandemic, creating potential opportunities for active investors in emerging markets and across the credit spectrum.
Portfolio Manager Denny Fish joins Adam Hetts in a discussion of how different segments of the tech sector will likely be impacted through each phase of the global economic reopening and recovery.
In this episode of our “Global Perspectives” series, Global Sustainable Equity Portfolio Managers Hamish Chamberlayne and Aaron Scully join Adam Hetts to discuss the latest trends in sustainability.
Key takeaways:
- The US has undergone a huge shift in its stance towards sustainability, with the new Biden administration, the US Federal Reserve (Fed) and the Securities and Exchange Commission (SEC) all focused on tackling climate change.
- A transformative synchronized investment boom into clean technologies is underway in the US and beyond, with the connection of digitalization, electrification and decarbonization improving efficiency across all industries.
- Low-carbon investing is more than simply investing in renewable energy companies and removing fossil fuels from a portfolio. We see many opportunities in the technology, business productivity and building sectors that all have a place in creating a greener economy.
- Intentionality, transparency and consistency are key tenets that span the broad spectrum of sustainable investing.
Global Head of Portfolio Construction and Strategy Adam Hetts talks to Seth Meyer and Tom Ross, portfolio managers on the high-yield bond strategies, about how with credit spreads gradually tightening, returns will likely become less about market direction (beta) and more about identifying individual opportunities (alpha).
Key Takeaways
- Credit spreads have taken a round trip, having widened dramatically at the start of the coronavirus crisis but have since narrowed significantly. A recovery should squeeze spreads tighter, but investors will need to rely more on identifying opportunities through good credit analysis and security selection.
- Effective vaccines should allow economies to reopen and earnings and cash flows to recover. This should accelerate as 2021 progresses, allowing balance sheets to begin to improve.
- Companies in the energy sector may have to run with more conservative balance sheets not just because the oil price may remain low, but also because the costs of financing are likely to rise as more environmental, social and governance (ESG)-led investors refuse to lend to these companies.
- Inflation is a potential concern. While modest inflation is often good for corporate revenues, the very low yields on government bonds means inflation may cause volatility in the underlying government bond market that could feed into volatility among corporate bonds.