BlueBay Insights: Recent Episodes
BlueBay Asset Management
Habib Subjally, Head of Global Equities and Senior Portfolio Manager, and Mike Reed, Head of Global Financial Institutions, discuss drivers of equity markets over the last few years, productivity and innovation in challenging times, and the Global Equity team’s focus on great businesses which create contingent assets.
Andrzej Skiba, Head of US Fixed Income and Senior Portfolio Manager, and Mike Reed, Head of Global Financial Institutions, discuss the robustness of the US economy, whether strong bond yields are likely to maintain momentum, corporate balance sheets and, of course, the potential return of Trump to the White House.
Polina Kurdyavko, Head of BlueBay Emerging Markets and Senior Portfolio Manager, and Mike Reed, Head of Global Financial Institutions, discuss recent drivers of returns, the impact of geopolitical events and – in a year of global elections – how the team’s proposed solution for the debt sustainability of Mexico’s largest state-owned oil company have been well received by the country’s presidential candidates.
My-Linh Ngo, Senior Director and Impact-Aligned Strategist, Tom Moulds, Senior Portfolio Manager, and Mike Reed, Head of Global Financial Institutions, discuss how ESG is increasingly considered in the investment process, market fragmentation in terms of regulation, ESG within fixed income portfolios, and bondholder influence and engagement.
Japan’s fortunes look set to change, with its stock market currently reaching all-time highs. Our European and Asian equity team members discuss the role that corporate governance reforms are playing in this improving investor sentiment.
Maia Becker is joined by Rob Lambert to discuss developments in the clean energy sector and its key challenges ahead.
Mike Reid is discussing investment grade with Marc Stacey, senior portfolio manager focusing on non-sovereign debt and specialising in financial institutions. The focus is on what's in store for credit spreads, the outlook for corporate issuance, and getting the lowdown on the financial sector.
Kaspar Hense, BlueBay Senior Portfolio Manager, Investment Grade, and Mike Reed, Head of Global Financial Institutions, consider the big-picture themes they believe all those involved in high-grade bonds should consider, and discuss how the differing dynamics across the asset class can help drive returns.
Laurence Bensafi discusses areas of long-term secular growth driving emerging markets and the impact on portfolio positioning.
We discuss metals and mining, a controversial sector when it comes to sustainability, but also one which is undergoing transformative change.
Adam Phillips, Managing Director and BlueBay head of developed markets special situations, delves into the unusual challenges corporates and consumers face. Adam also discusses the magnitude of potential defaults and where the opportunities may lie across multiple sectors and countries for special situations.
Polina Kurdyavko delves into a number of emerging market current topics discussing why emerging markets are outperforming developed markets, geopolitics and the difficulties of implementing ESG in EM.
It’s clear that Europe and Asia need to work together to reach net zero. In our latest podcast, members from each team discuss sustainability topics that resonate around the globe.
Investors are worried about the uncertainty around recession, monetary policy and inflation. And in the face of uncertainty, investors are looking for ways to protect their portfolios. Pierre-Henri de Monts de Savasse discusses why he thinks convertibles has a role to play in that risk mitigation and diversification movement. He also touches on why there is so much focus on convertibles at the moment covering ESG, AI and the outlook for the next 12 months.
Mike Reed, Head of Global Financial Institutions, talks to Mark Dowding, BlueBay CIO, RBC Bluebay Asset Management, about a range of topics that we believe all investors should be thinking about right now. From the risk of a credit crunch and recession in the US to the likelihood of further rate hikes in Europe, plus the impact of global markets if or when Japan ends yield curve control. They also discuss the state of investing in the UK and finally, take a look at what it is in store for investors in the second half of 2023.
Polina Kurdyavko explains distinctions between different categories of “Emerging Markets” and the challenges faced by so called “Frontier markets”.
David Riley discusses US inflation, earnings season expectations, the UK economy and Chinese politics.
David Riley discusses the extraordinary crisis of credibility in UK policies, and future implications for the UK economy.
David Riley reflects on the strength of ‘King dollar’, the outlook for the Euro area, and BOE expectations for the UK.
David Riley reflects on the latest meeting of the US Federal Reserve, the end of negative interest rates in Europe, and the risk of recession.
David riley discusses the current state of the global economy and the actions of key central banks.
Tim Leary joins the BlueBay Insights podcast to give a 5min update on global high yield markets.
We asked Tim:
- Have high yield spreads sold off by enough?
- Would you say high yield is in a better place now versus 2008?
- Why has there been so little issuance year to date?
- What’s the technical landscape like in US & European HY?
- What’s liquidity like in the market?
- How are you positioning as we shift into summer?
David Riley reflects on the past month’s risk markets, the outlook for China and the US Federal Reserve, near-term concerns about the risks to growth, and the shifting narratives on growth and inflation.
As bonds are selling off while risk assets continue to rise, David Riley discusses the disconnect between the bond and equity markets and the relevance of the yield-curve for investors.
David Riley discusses the macro implications of the Ukraine-Russia crisis, how financial markets and central banks are reacting, and the Fed’s first interest rate hike since December 2018.
Tim Leary joins the BlueBay Insights podcast to give a 5min update on global high yield markets.
We asked Tim:
- It’s been volatile start to the year – how much has come from interest rate moves and how much is risk-premium driven?
- Can you take us through the performance of leveraged loans relative to high yield bonds so far this year – are you seeing any mispricing opportunities here?
- With defaults picking up, are there any safe havens in high yield?
- Now we’re well into Q1, have you seen any clear trends in flows?
- We’ve seen green and ESG stocks suffer heavy sell-offs over the past few months. Have ESG-related credits suffered the same fate?
- How are you positioning as we shift into spring?
Mark Shohet joins the BlueBay Insights podcast to share his expertise on CLOs and the current market opportunity.
We asked Mark:
- What is a CLO?
- How do the debt tranches work in practice?
- What differentiates a CLO from other securitised products?
- How big is the CLO market and what are the issuance expectations for this year?
- What’s performance been like so far in 2022?
- Are CLOs looking attractive in the current market environment?
- How are the fundamentals?
- What do you see as the biggest risk for the asset class?
David Riley is joined by BlueBay’s EM Senior Sovereign Strategist Timothy Ash to discuss the macroeconomic implications of the Russia/Ukraine conflict.
David Riley is joined by BlueBay’s EM Senior Sovereign Strategist Timothy Ash in this special podcast discussing the rapidly escalating Russia-Ukraine conflict.
David Riley shares his views on higher government bond yields, the ECB’s hawkish tilt, new US data points and the global bond market sell-off.
David Riley shares his views on volatility in equity markets, geo-political tensions, and the Fed meeting.
David Riley updates us on the latest raft of central bank meetings: the Fed’s hawkish pivot, the end of the ECB’s pandemic emergency purchase programme and a rise in Bank of England interest rates.
Tom Moulds & Robert Lambert join the BlueBay Insights podcast to discuss the impact of inflation on the energy and utilities sectors.
We ask:
- Tom, if you could start us off with a quick summary of the inflationary environment and how it’s impacting fixed income investors.
- Rob, your specialist focus is utilities. Could you give us an overview of how inflation is impacting the sector?
- Which sub-sectors are seeing the most or least pricing pressure?
- Are we likely to see any beneficiaries of rising inflation and high energy prices?
- Alongside inflationary pressures, have ESG considerations had any pricing impacts across the utilities sector?
- When do you expect inflation to subside within the sector?
- Tom, how are the dynamics within the utilities sector influencing your current portfolio positioning?
Tim Leary and Jeff Cramer join the BlueBay Insights podcast to discuss the impact of inflation on industrials and the power sector and how it’s influencing high yield and leveraged finance strategies.
We ask:
- Tim, with interest rates rising, inflation is a hot topic for investors. Can you give us a quick summary on the inflation situation and what it means for high yield?
- Jeff, one of your specialist focus areas is industrials. Could you give us an overview of how inflation is affecting the sector?
- What’s causing that inflation specifically?
- Have ESG considerations had any pricing impacts across the power sector, in addition to inflation pressures?
- When do you expect inflation to subside within the industrial or utilities sectors?
- To close, let’s consider positioning. Tim, how are the dynamics within the utilities sector influencing your current portfolio positioning?
Chief Investment Strategist David Riley joins us to discuss inflation as a dominant theme in global markets, and to answer the question, “Is there excessive exuberance in credit markets?”.
Tim Leary and Frank McCreary join the BlueBay Insights podcast to discuss the impact of inflation on the energy sector and how it’s influencing high yield and leveraged finance strategies.
We ask:
- Tim, can you give us a quick summary on the inflation situation and what it means for high yield investors?
- Frank, you’re an energy specialist. How is inflation impacting the sector?
- Can you expand on this – how exactly is the oil & gas sector pushing up inflation?
- What are some of the reasons for the dramatic rise in commodity prices?
- How exactly have weather patterns impacted energy prices?
- How have ESG considerations effected the price of energy?
- How do you expect the energy landscape to change over the next five years?
- Tim, how are the dynamics within the energy sector influencing your current portfolio positioning?
David Riley joins us on the BlueBay Insights podcast to share his views on short term volatility and interest rates.
David Riley joins us on the BlueBay Insights podcast to discuss his views on inflation .
Tim Leary joins us on the BlueBay Insights podcast to discuss how he engages with issuers to make better investment decisions and to drive ESG progress.
We asked Tim:
- Increasing levels of bondholder engagement have tracked the growth of ESG considerations when investing. How have you seen this play out in the industry?
- As a risk taker, how do you engage with bond issuers?
- Within the fixed income universe, are there nuances across the different credit asset classes that shape how you engage or what influence you can have?
- Could you give us an example of some recent engagement activity you’ve undertaken?
Alex Collins joins us on the BlueBay Insights podcast to discuss the main challenges of ESG in Emerging Markets.
We asked Alex:
- How should we think about ESG in Emerging Markets?
- What should investors keep in mind when applying ESG methodologies?
- Can you summarise the main challenges of ESG in Emerging Markets?
David Riley joins us on the BlueBay Insights podcast to share his thoughts on recent global market volatility, the lack of market reaction to the Fed announcing the tapering of QE and power prices in Europe.
Lucy Byrne joins us on the BlueBay Insights podcast to discuss ESG engagement and how bondholders can have their say.
We asked Lucy:
- What do investors mean when they talk about engagement?
- How can bondholders engage without voting?
- How does BlueBay use engagement methods to have a positive ESG impact?
- Can you share an example of collaborative engagement?
David Riley joins us on the BlueBay Insights podcast to discuss the Jackson Hole Economic Symposium and his thoughts on the macroeconomic implications of climate change.
Tim Leary joins us on the BlueBay Insights podcast to discuss how energy underweights and bondholder engagement impact high yield investing.
We asked Tim:
- Can high yield ESG strategies continue to perform in a prolonged commodity rally?
- Does running a high yield ESG strategy mean you completely exclude oil producers?
- Other high yield ESG managers often run energy overweights, whereas you’re underweight the sector – can you talk us through this positioning?
- Bondholder engagement is gaining momentum within the industry – what gives high yield investors a slightly more powerful voice in this space compared to say, investment grade creditors?
- Can you share with us a recent example of engagement action and any positive outcomes?
Senior Corporate analyst, Robert Lambert, joins us on the BlueBay Insights podcast to speak about ESG and water-related issues.
Polina Kurdyavko, Head of Emerging Markets, speaks with Institutional Portfolio Manager, Bashir Farukh on the current emerging markets outlook.
David Riley joins us on the BlueBay Insights podcast to discuss volatility in Chinese financial markets and the latest news from the Federal Reserve meeting.
Tim Leary joins us on the BlueBay Insights podcast to give a quick update on global high yield markets.
David Riley joins us on the BlueBay Insights podcast to review the year so far and share his views on key themes for second half of 2021
James Macdonald joins us on the BlueBay Insights podcast to discuss the overlooked yield potential offered by national champion banks and his outlook for the sector.
Senior ESG analyst, Lucy Byrne, joins us on the BlueBay Insights podcast to speak about the ESG Investment Update.
David Riley joins us on the BlueBay Insights podcast to discuss the market response to the US Federal Reserve meeting.
In this episode David discusses his latest paper on inflation expectations.
David Riley joins us on the BlueBay Insights podcast to share his thoughts on the investment implications for higher inflation
In this episode we ask David about his views on inflation over the coming months. David also discusses the market implications of volatility in cryptocurrencies.
Tim Leary joins us on the BlueBay Insights podcast to discuss how ESG factors do (and don’t) impact high yield investing.
We asked Tim:
- Can you really be a high performer and limit your investible universe?
- How do you mitigate the tracking error associated with ESG exclusions, namely fossil fuels?
- Is there an appropriate high yield benchmark for ESG investors who are focused on climate risks?
- In general, how does portfolio turnover in a HY ESG strategy compare to a conventional fund?
- What’s your approach to managing downside?
- Are there any complications associated with ESG strategies that general high yield approaches don’t face?
- In terms of engagement, we typically think of this as being something more for equity holders. As a bond holder, what are the ways you engage with issuers?
- What kind of responses are you getting from the companies you speak to in the high yield universe?
- Sustainability-linked bonds are growing in popularity and we’ve seen some issuance in the high yield sector – do you think this is the beginning of a trend?
David Riley joins us on the BlueBay Insights podcast to share his thoughts on President Biden’s first 100 days in office from an investor perspective.
We asked David:
- What is your assessment of US President Biden’s first 100 days in office from an investor perspective?
- Will President Biden’s spending and tax plans get passed and what are the broader implications?
- Could Europe could follow the US in a more Keynesian approach to fiscal policy?
- US economic data continues to be impressive but there was a big downside miss on jobs in April.
David Riley joins us on the BlueBay Insights podcast to discuss credit markets and the policy monetary policy meetings.
We asked David:
- Global equities have posted new highs and US Treasury yields have fallen. Are we back in a ‘goldilocks’ environment for markets?
- How would you characterise the state of credit markets?
- With valuations quite high by historic standards, how much more value is there left in credit?
- You mentioned emerging market credit as lagging developed market credit in the first months of this year. Is there contagion risk from the distress of the Chinese company Huarong that is currently in the headlines?
- The ECB’s latest monetary policy meeting just concluded. What are your takeaways?
- The Fed meets next week. Are you expecting any fireworks?
- Any other recent developments you think are worth highlighting?
Tim Leary joins us on the BlueBay Insights podcast to give a quick update on global high yield markets as we enter Q2.
We asked Tim:
- Can you give us a quick overview of the global high yield market year-to-date – how’s the first quarter gone for US high yield?
- How does that compare to European HY?
- Which market do you favour for the rest of the year?
- What do you think will drive returns through Q2 and into the second half of the year?
- Conversely, what do you see as the top three challenges or risks to high yield performance in 2021?
- How might Joe Biden’s USD1.9 trillion stimulus package impact the high yield market?
- The reflation trade is topical at the moment – is this a cause for concern? How could higher inflation impact high yield?
David Riley joins us on the BlueBay Insights podcast to share his thoughts on the months ahead.
We asked David:
- Let’s take stock of the quarter
- What do you think will be the key issues and themes for the quarter ahead?
- You highlighted is another fiscal package out of Washington.
- Moving over to Europe - there seems to be some risk to the implementation of the EU Recovery Fund. What is going on?
- Any thoughts on the Archegos saga?
David Riley joins us on the BlueBay Insights podcast to update us on the latest round of central bank meetings.
We asked David:
- The US Federal Reserve meeting was highly anticipated. Did it live up to its headline billing?
- The Fed revised up its growth and inflation forecasts, but was there any change to its interest rate projections, the so-called dots?
- It does seem the Fed was very dovish, yet bond yields continue to move higher.
- The US Federal Reserve was not the only central bank meeting yesterday. The Brazilian central bank also held a policy meeting.
- The ECB also had a policy meeting, could you update us?
- How should investors navigate higher bond yields and interest rate volatility?
David Riley joins us on the BlueBay Insights podcast to share his views on the performance of the financial markets and the latest economic data.
We asked David:
- What are your takeaways from the performance of financial markets so far this year?
- China’s top bank regulator said he is worried by bubbles in foreign financial markets. Do you share his concerns?
- Returning to the bond market, is the tantrum over?
- Stepping back, is the flow of economic data consistent with our above-consensus view for global growth?
- Any key highlights from the UK budget worth sharing with our international audience?
David Riley joins us on the BlueBay Insights podcast to share his views on bond yields. Will they go higher?
We asked David:
- Yields on government bonds have moved meaningfully higher. What are the drivers of the rise in bond yields?
- Do you think that bond yields can go much higher?
- Are you worried that there could be another ‘taper tantrum’?
- Are you concerned by higher bond yields?
Marc Stacey joins us on the BlueBay Insights podcast to share his expertise on coco bonds & European banks, discussing fundamentals, risks, ESG opportunities and the potential investment ‘sweet spot’ enjoyed by AT1 capital.
We asked Marc:
- Banks were deemed villains following the global financial crisis back in 2008 but have been a key part of the solution to the corona virus pandemic. Can you talk us through this shift and what it means for investors?
- Your investment approach has always focused on fundamentals – how are things looking right now? What’s the situation with non-performing loans – have we seen the peak or do you anticipate a pick-up later this year?
- In a world of rising inflation and swathes of negative-yielding debt, bank capital in the form of AT1s seems to offer something of a ‘sweet spot’ to investors – in your view what’s the potential opportunity here?
- Where are you seeing the greatest alpha potential?
- What are the possible risks that could challenge your core investment views this year?
- Where do you think an allocation to coco bonds best sits within a broader portfolio and who do you think should be looking at the asset class this year?
Andrzej Skiba joins us on the BlueBay Insights podcast to share his expertise on the high yield asset class, discussing growth trends, the default outlook, ESG factors and where he sees investment potential this year.
We asked Andrzej:
- With the roll-out of Covid vaccines, most economists are predicting a sharp rebound in global growth during 2021. In your view, could this lead to inflationary pressures and losses in bond markets and how might this impact the high yield asset class?
- Default rates were surprisingly low in 2020 largely due to government support schemes. As these schemes come to an end, do you expect defaults to pick-up damaging overall high-yield returns?
- Fallen angels were a big topic last year – could you update us on any trends here and notable impacts from the 2020 downgrades?
- Historically, the high yield universe was dominated by US issuers, but now the market is more global – how do you and the team manage portfolios to take account of this shift?
- What about ESG in the high yield market? Is it possible to manage a high yield bond strategy while adhering to ESG principles? And does doing so impact performance?
- Where do you see the greatest potential opportunities in 2021?
David Riley joins us on the BlueBay Insights podcast to discuss the vaccine rollout, corporate earnings and Reddit traders.
We asked David:
- January had been a relatively quiet month for financial markets but ended with headlines over Reddit traders taking on Wall Street. What is your take?
- In our last podcast, you said you were watching the vaccine rollout and corporate earnings. Let’s discuss vaccines first, there has been quite a lot of news over the last week or so.
- Finally, what are your initial thoughts on former ECB President Mario Draghi becoming Italy’s new Prime Minister?
Senior ESG analyst, Lucy Byrne, joins us on the BlueBay Insights podcast to discuss increased transparency in ESG.
We asked Lucy:
- What are the key themes for ESG in our industry for 2021?
- What are our ESG priorities at BlueBay?
- How can we practically apply ESG integration?
Polina Kurdyavko joins us on BlueBay Insights to share the outlook for Emerging Marketing in 2021.
We asked Polina:
- In a world hungry for growth and income, where do the opportunities lie for Emerging Markets investors in 2021?
- After a very volatile year what are the key macro and geopolitical risks facing Emerging Markets in 2021?
- How could EM be impacted by a Biden presidency?
- How should investors position EM fixed income within their portfolios as 2021 gets underway?
David Riley joins us on the BlueBay Insights podcast.
We asked David:
- Joe Biden was inaugurated this week as the 46th President of the United States. What’s your take on his first actions in office and the market implications?
- Talking of politics, there has been a lot going on in Europe over the last couple of weeks. Can you give a brief update?
- What were the key takeaways from the latest ECB meeting?
- What else are you watching right now David?
Zhenbo Hou joins us on the BlueBay Insights podcast to share his thoughts on how a change in US leadership could impact China.
We asked Zhenbo:
- Emerging markets rallied as we learnt of the Democratic victory back in November, but what’s the state of play now – how has Trump left relations with China as we head into Biden’s inauguration and how are markets reacting?
- The Biden administration is expected to bring the return of multilateralism – do you see this manifesting through greater cooperation with China on global issues, or perhaps the US and Europe working together to constrain China’s growing its global dominance?
- How has your outlook on China shifted as a result of the changing US leadership?
- How are you expecting Xi and Biden to work together on environmental issues, particularly climate change?
David Riley joins us on the BlueBay Insights podcast to share his outlook on 2021.
We asked David:
- This is our first podcast of 2021 and it has been an extraordinary start to the year…
- With the Democrats winning the Georgia Senate races, what are the implications for US policy and investors?
- Regarding the rise in inflation expectations – is inflation something investors should worry about?
- We saw a strong rally in December in risk markets yet the virus and lockdowns continue to spread. Is there a disconnect between the market and the real world?
David Riley joins us on the BlueBay Insights podcast to update us on the latest economic data and shares highlights from his 2021 outlook.
We asked David:
- There has been a huge amount of economic data and policy news over the last few weeks. What are the takeaways?
- You recently published your investment outlook for 2021. What are the key highlights?
- Are you concerned that our investment outlook is consensual?
David Riley joins us on the BlueBay Insights podcast to discuss vaccine news, a credit wind-down in the US and the implications of the Biden administration.
We asked David:
- Markets seem to be caught between good news on vaccines and bad news on the virus and growth.
- US Treasury Secretary Mnuchin has told the Fed to wind-down its credit facilities. What are the implications for the US credit market?
- President Trump has finally said that transition to the incoming Biden administration should go ahead. What is your view on what a Biden administration will look like?
- The UK Chancellor announced his spending review. What were the takeaways?
David Riley joins us on the BlueBay Insights podcast to discuss the impact of positive vaccine news on markets.
We asked David:
- The excitement of the US elections was followed by positive news on a COVID vaccine. Is the vaccine news a game-changer for markets?
- With the rally in risk markets post the US election and now with the vaccine news, can it continue and what are the broad asset implications?
- You mention bumps in the road – where could they come from?
David Riley joins us on the BlueBay Insights podcast to share initial thoughts on the US election, fiscal stimulus in Europe and a market rally.
We asked David:
- Where do we stand right now in terms of the US presidential election?
- Is there a chance of a contested election?
- You have previously highlighted the importance of which party controls the Senate. What happened in the Senate race?
- Why did markets rally through yesterday despite the uncertainty around the US elections?
- What do you think are the market implications of a Biden presidency and split Congress?
- Finally to Europe: the second wave of the virus in Europe has taken off and governments have announced tighter social distancing restrictions, what is the fiscal response?
David Riley joins us on the BlueBay Insights podcast to share his thoughts on the outlook for China, and the latest on the US election and Brexit.
We asked David:
- There is a pick-up in coronavirus cases across Europe. What are the economic and market implications?
- This week is another Brexit deadline. What is the current state of play in EU – UK negotiations and outlook for the UK?
- Turning from UK to the world’s second biggest economy, what is the outlook for China?
- You mention the US elections and last week you published a note on the market implications. What are the key takeaways?
- What are your expectations for the third quarter corporate earnings?
Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets.
We asked Polina:
- How are Emerging Markets reacting to next month’s US election?
- We’ve recently seen an emerging-market corporate borrower issue debt with an ESG focus – do you think this will be a growing trend?
- The economic situation in Argentina appears to present a precarious outlook – can you share you view?
David Riley joins us on the BlueBay Insights podcast to update us on the market implications of the US elections.
We asked David:
- Why have financial markets been choppy and without direction of late?
- We had the first US presidential debate this week. What is the current state of play in the US elections?
- What are the market implications of the US elections?
Tim Leary joins us on the BlueBay Insights podcast to update on high yield and leveraged finance markets, with a special focus on the subject of liquidity.
We asked Tim:
- How does the global high-yield universe breakdown in terms of the US and European split? Are there any notable differences between the two regions that investors should be aware of?
- What percentage of the US HY market trades enough to be considered liquid?
- In terms of active versus passive investing – how significant is the ETF portion of the universe?
- As an active manager, how do you define liquidity?
- Did you learn anything from the coronavirus crisis period about best-practice liquidity management or anything that particularly surprised you as a seasoned investor?
- Could you give us a quick liquidity outlook for the asset class and some positioning highlights as we approach the final quarter of the year?
Senior ESG analyst, Lucy Byrne, joins us on the BlueBay Insights podcast to share her views on the impact of the COVID crisis on ESG investing.
We asked Lucy:
- Has the appetite for ESG among investors increased during the COVID crisis?
- How has BlueBay’s ESG business been affected by the crisis?
- What is the rationale behind BlueBay’s ESG priorities for 2020 and where do you see areas for improvement?
David Riley joins us on the BlueBay Insights podcast to update us on the Brexit saga and the latest takeaways form the Fed.
We asked David:
- Brexit has returned onto investors’ radar. What are your thoughts on the latest developments in the Brexit saga?
- What are your takeaways from the latest Fed meeting?
David Riley joins us on the BlueBay Insights podcast for his regular update on the latest economic data.
We asked David:
- US Federal Reserve Chairman Jerome Powell’s speech at Jackson Hole is a big point of debate amongst investors. What is your view on the Fed’s new policy framework?
- What are you expecting from next week’s meeting of the European Central Bank?
- Equity and credit markets had another positive month in August. Do you expect the rally to continue?
Tim Leary joins us on the BlueBay Insights podcast to update on high yield’s positive summer run, what might be to come in the default cycle and how influential ESG really is to leveraged finance investors.
We asked Tim:
- High yield has had an encouraging summer run – July proved to be a notable month for the US market, which registered its largest monthly gain since October 2011. Has the investment opportunity largely topped out for the year or are you still seeing value?
- The second-quarter earnings season seemed broadly upbeat for high-yield companies – did any sectoral themes or surprises emerge in line with announcements?
- Moving onto the topic of defaults, we saw an initial wave in the early days of the pandemic, but things appear to have stabilised now. Could you talk us through your expectations for the shape of the default cycle?
- With ESG being both part of the BlueBay investment philosophy and a high-profile industry focus, can you comment on how important is it for you as an active investor in the high-yield market?
- Finally, could you talk us through any big risks or watchpoints that are on your investment horizon for the remainder of the year?
Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets.
We asked Polina:
- After prolonged negotiations between the Argentine government and major bond holder groups, there seemed to be a swift end to restructuring talks. Firstly, were you surprised by the eventual agreement and secondly, what are the broader implications for the country?
- Considering the unfortunate circumstances surrounding the Beirut port explosion, how do you evaluate governance risk within the investment process?
- Staying in the same region, some investors have perceived the recent bout of Turkish lira weakness as a sign that Turkey appears to be on the brink of another Balance of Payments crisis. How is the current landscape different to August 2018 when USD/TRY first went above 7?
- Turning to technicals; flows into Emerging Market-dedicated bond funds have remained positive over the last few months, while EM-dedicated equity funds continue to see outflows. Do you expect this trend to continue?
David Riley joins us on the BlueBay Insights podcast to update us on the latest economic data, US-China relations and the upcoming US elections.
We asked David:
- Since we last spoke there has been a raft of economic data. What does it tell us about the outlook for the global economy?
- In the second quarter, the UK economy contracted more than any other major economy – what’s the outlook for the UK?
- US-China relations appear to be going from bad to worse – why aren’t the markets reacting?
- You've just mentioned the US elections. Do you think that the market is now expecting a Biden victory?
David Riley joins us on the BlueBay Insights podcast to update us on the latest quarterly GDP figures from the US.
We asked David:
- A theme that has emerged in markets is the weakness of the US dollar. Are we entering a dollar bear market?
- You mentioned the rise in the gold price and worries about central banks debasing currencies with money printing. What are the implications for fixed income investors?
- Our discussion is highlighting just how important the Fed is for markets. What is your takeaway from the latest Fed meeting?
- The second quarter US GDP figures have just been released – what did you learn?
David Riley joins us on the BlueBay Insights podcast to talk about fiscal stimulus, the Fed, and yield curve control.
We asked David:
- What’s your view on the agreement by EU leaders on a new European Recovery fund?
- Is the package big enough to support the recovery in the EU economy?
- You mentioned US fiscal stimulus. Congress is debating another budget package. What is the latest and what do you expect?
- The Fed meets next week. What are you expecting?
- What is yield curve control?
Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets.
We asked Polina:
- Over the past weekend the Ecuadorian government reached an agreement in principle with a major group of private bondholders which included BlueBay. How does this negotiation compare with previous restructuring talks that you have been involved in?
- Do you expect the sovereign debt re-profiling theme to be one of your key focus areas for the rest of the year? What other countries will be talking to creditors and how significant is Ecuador’s precedent for other negotiations?
- How has the easing of lockdown restrictions impacted economic activity in various Emerging Market countries?
- So far this calendar year has been very atypical in many aspects. Do you expect any of the normal summer seasonality trends in terms of liquidity and asset price volatility to apply this time around?
- And lastly can you comment on the opportunities you are seeing on the more illiquid side of the EM investment universe.
David Riley joins us on the BlueBay Insights podcast to talk about the latest jobs data from the US and the likelihood of a V shaped recovery.
We asked David:
- There has been a lot of focus on the recent upturn in the number of COVID infections in the US. Are investors right to be concerned or are these worries exaggerated?
- What are the implications for the US economy and recovery?
- You have stressed the importance of the jobs market for the recovery. Can you explain why it is so key to your view on the shape of the recovery?
- What does the latest jobs data for the US tell us?
Andrzej Skiba joins us on the BlueBay Insights podcast to share his views on credit.
We asked Andrzej:
- We saw a performance reversal during May with the US overtaking Europe – what drove this regional switch? What drove the three-week performance run and why did it end?
- Fallen angels remain topical – how are you investing here? Are you seeing any immediate cross-over opportunities post-Covid?
- Lower-rated securities have generally trailed the overall high-yield rebound, although we’ve recently seen some signs of triple Cs outpacing double Bs – can you comment on what’s happening here?
- How is the high-yield sector performance in emerging markets? Are you considering making any changes to your underweight positioning there?
- Overall, which regions and sectors do you currently favour in your portfolio?
David Riley joins us on the BlueBay Insights podcast to share his thoughts on the latest macroeconomic data and key themes for the second half of 2020.
We asked David:
- What can investors take from the latest round of macroeconomic data?
- As we are in the middle of June, what do you think are the key themes for investors in the second half of the year?
- You mentioned Brexit and as you forecasted, the Bank of England announced an increase in its bond buying. What is the outlook for UK assets in your view?
Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets.
We asked Polina:
- Emerging market currencies have risen by around 7% relative to the US dollar over the past month. Do you think they are simply rebounding to pre sell-off levels or is this the beginning of a more sustained rally?
- Emerging market sovereign hard-currency bond issuance is running at record pace compared to prior years. Should investors interpret that positively or negatively?
- From a corporate perspective, which companies are the most resilient to the current economic conditions and similarly which ones are showing signs of stress?
- In terms of investment opportunities across emerging market debt, do you have preferred credit-rating or maturity bucket?
- How would summarise your investment view as we move into the second half of 2020?
Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets .
We asked Polina:
- Emerging market currencies have risen by around 7% relative to the US dollar over the past month. Do you think they are simply rebounding to pre sell-off levels or is this the beginning of a more sustained rally?
- Emerging market sovereign hard-currency bond issuance is running at record pace compared to prior years. Should investors interpret that positively or negatively?
- From a corporate perspective, which companies are the most resilient to the current economic conditions and similarly which ones are showing signs of stress?
- In terms of investment opportunities across emerging market debt, do you have preferred credit-rating or maturity buckets?
- How would summarise your investment view as we move into the second half of 2020?
David Riley joins us on the BlueBay Insights podcast to share his thoughts on the current market outlook and latest moves by the Fed to provide liquidity.
We asked David:
- What did we learn from the latest meeting of the Fed’s monetary policy committee?
- What do you think are the downside risks to the economic and market outlook?
- Last week we talked a little about recent market developments. What has caught your attention?
David Riley joins us on the BlueBay Insights podcast to discuss the rebound in financial markets and to explain the ECB’s latest policy support.
We asked David:
- There has been a meaningful rebound in many financial markets since March. What do you think will be the drivers for markets over the next few months?
- You remarked that the European Central Bank recently announced further policy support. Can you explain the ECB’s latest actions and the market implications?
- Relations between the US and China appear to be worsening. What is the current state of play?
Marc Stacey joins us on the BlueBay Insights podcast to share his views on the current market.
- Can you explain what national champion banks are, how they influence the economy and their importance to investors?
- In your view, will only the nation champions likely make it through this crisis, or are you finding other attractive bank holdings through bottom-up issuer selection?
- Banks were deemed villains following the global financial crisis back in 2008 but could potentially prove heroes this time – can you explain why this is?
- How long do you think the current dividend freeze will last? For investors, what are the potential implications and will AT1 coupon payments be impacted?
- Your investment approach has always focused on fundamentals – how are things looking right now?
- Is now looking like a good market entry point, in your view?
David Riley joins us on the BlueBay Insights podcast to discuss market volatility, the European recovery fund and the outlook for UK assets.
We asked David:
- There has recently been a pick-up in market volatility. What are investors reacting to?
- You mentioned the Franco-German proposal for the European recovery fund. Can you tell us a more about its significance?
- Staying in Europe, Brexit appears to be moving back onto investors’ radar. What is our current assessment and the outlook for UK assets?
David Riley joins us on the BlueBay Insights podcast to share his thoughts on the market implications of relaxing lockdowns.
We asked David:
- What is your current thinking on easing of restrictions and the resulting market consequences?
- A feature of credit markets, especially in investment grade, is a surge in bond supply. Why and what are the implications?
- You mentioned that central banks will have to keep interest rates at very low levels because of the extra debt created by the crisis. DO you think the Fed will follow the ECB and Bank of Japan by taking overnight rates into negative territory?
- The big news event last week was the German Constitutional Court ruling against some aspects of the ECB’s asset purchase programmes. Is this a significant development?
Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets.
We asked Polina:
- Are there any price dislocations from an Emerging Market Debt perspective that have surprised you?
- Over the last few weeks we have seen plenty of new issuance from Emerging Market Sovereigns. Do you expect corporates to follow in the coming weeks?
- How do you expect the recent deterioration of China’s political relationship with the West to affect the economic and market outlook?
- Generally, markets have been expecting a deflationary bias because of the coronavirus shock. Any chance that markets might be surprised on inflation?
- How would you summarise where the key opportunities and risks today lie within the various segments of Emerging Market Debt?
David Riley joins us on the BlueBay Insights podcast to recap news from the central banks.
We asked David:
- What are the key takeaways from recent Central Bank meetings?
- Should investors be worried by inflation?
- Are rising government debt levels a cause for concern?
Andrzej Skiba joins us on the BlueBay Insights podcast to recap recent market events and share his views on credit.
We asked Andrzej:
- What were the highlights and lowlights in April?
- What drove the three-week performance run and why did it end?
- Were the latest central bank actions positive?
- What are the differences between the US and Europe in terms of issuance?
- How are energy companies coping in the US?
- How are you positioning to account for rising defaults?
- What’s your current outlook?
Chief Investment Officer Mark Dowding provides his views on the last two weeks, black swan events, what hasn’t changed and where we go from here.
We asked Mark:
- What’s changed in the last two weeks (since your last podcast)?
- Looking at the rest of the Q2, what do you think we will see? And more long term?
David Riley joins us on the BlueBay Insights podcast to discuss his new paper on the path to recovery as well as share his thoughts on oil prices and EU fiscal unity.
We asked David:
- What happened to the price of oil this week and what is the impact?
- What were some of the takeaways from your new note on the path to recovery?
- Could the EU unravel without a more united fiscal stance?
David Riley joins us on the BlueBay Insights podcast to explain the significance of the recent Fed measures.
We asked David:
- What is the significance of the Fed measures?
- Will the rally in risk assets continue?
- What do you think the path of the economic recovery will be?
- What is the outlook for emerging markets?
Chief Investment Officer, Mark Dowding, speaks about recent market volatility and what he is focusing on now, as an investor.
We asked Mark:
- What are your overall thoughts about market events in the last three weeks?
- With market dislocation comes opportunities – are you seeing any green shoots?
- What is most important to you for the next few days?
Ken Yoshida joins us on the BlueBay Insights podcast to discuss market volatility and liquidity.
We asked Ken:
- How is the Japan office coping with new working patterns?
- How are Japanese clients responding to the current market volatility?
Chief Operating Officer, Luc Leclercq joins us on the BlueBay Insights podcast to speak about his main areas of focus during these unprecedented times.
- What are your main areas of focus?
- How will the impact of the last few weeks change our industry going forward?
David Riley joins us on the BlueBay Insights podcast to discuss the latest economic data and highlights key takeaways from his research on investment grade credit published earlier this week.
We asked David:
- What are the early signs on the economic data on the depth of the global recession?
- When will economies get back to work?
- You have just published some research on investment grade credit. What are the key takeaways?
- Are we at the end of the sell off?
Polina Kurdyavko, Head of Emerging Markets, speaks with Claudio Da Gama Rose, Institutional Portfolio Manager on the BlueBay Insights podcast to answer questions on responses of governments and corporates to the current situation.
We asked Polina:
- How you think EM governments will manage the fallout from the crisis – do you think sovereign issuers have enough buffers to manage upcoming maturities for the rest of the year?
- In your opinion, which EM region and countries have the most policy flexibility?
- And now switching to companies, what is the funding pressure looking like for EM corporates?
- What are your default expectations for this year and next?
- What feedback are management teams providing you on the economic/fundamental backdrop for their companies in light of the current environment? Any early green shoots?
Marc Kemp joins us on the BlueBay Insights podcast to discuss leveraged loan market performance, price action and fundamentals.
We asked Marc:
- We’ve heard a lot about precipitous falls in high yield bonds and a commensurate spread widening over the past couple of weeks – how have leveraged loans fared?
- The magnitude of moves is really very large and essentially on par with what we have seen in high yield bond markets on both sides of the Atlantic – that’s pretty unusual isn’t it?
- Why do you think loans actually lagged over the past month?
- It’s clear price action has been rather punitive, what, if anything, should we infer from this in regard to the fundamentals of issuers in the loan market?
David Riley joins us on the BlueBay Insights podcast to share his thoughts on the latest actions from policymakers.
We asked David:
- Have policymakers done enough to support the economy and financial markets?
- Are we over the worst of the sell off?
- In the short term - what indicators do you look to for insights?
Marc Kemp joins us on the BlueBay Insights podcast to discuss fundamentals, defaults and fallen angels in global high yield markets.
The views expressed in this piece are not intended to be a source of advice or credit analysis and the information does not constitute investment advice.
We asked Marc:
- Things are clearly changing rapidly – how do you assess fundamentals for the companies that you follow in such an environment?
- What’s your latest thinking on defaults?
- Can you comment on falling angels? Presumably pressure will be evident on the investment grade sector too?
- Can you talk us through current valuations in HY?
Graham Stock joins us on BlueBay insights to discuss the latest economic data from China.
Marc Kemp joins us on the BlueBay Insights podcast to discuss the most recent movements in global high yield, how the market is differentiating despite the chaos and how we’re not reliving 2007.
We asked Marc:
- We’re clearly in unprecedented times, can you help us frame the magnitude of the moves that we have seen in global high yield markets over recent weeks?
- Have you witnessed an element of differentiation in those moves or has everything fallen indiscriminately?
- How does this all compare to 2007?
David Riley joins us on the BlueBay Insights podcast to discuss latest market developments and outlines a path to stability.
We asked David:
- Where do you think we stand now in terms of the spread of the virus and the economic and financial consequences?
- Is this the beginning of the end of this crisis? When will we see economic and market recovery?
- Why are some commentators now suggesting that we again are facing a financial crisis?
- What has been happening in fixed and credit markets?
- What is the path to stability?
David Riley, Chief Investment Strategist, joins us on the BlueBay Insights podcast to discuss the volatility in financial markets, likelihood of recession and buying opportunities for investors.
David answers:
- We have seen huge volatility in financial markets in the last few weeks as the coronavirus has spread with big corrections in equity markets, widening in credit spreads and government bond yields falling to record lows. Have markets over-reacted?
- You mentioned the collapse in oil prices in 2015 and oil prices have fallen around 40% in the last few weeks. What are the implications of the collapse in global oil prices?
- How should and will policymakers respond? Will central banks cutting interest rates help if the virus means companies will produce less and consumers spend less?
- So, investors are right to be worried about growth. Does that mean it is likely there will be a global recession?
- Our base-case means that after a near-term hit to the global economy, growth will pick-up. With the big sell-off in credit and emerging markets, does this mean this is a buying opportunity for investors?
- What are the key developments that you think investors should watch over the coming weeks?
- Looking beyond the near-term hit from the coronavirus, are there any key themes that investors should consider?
Marc Stacey joins us on the BlueBay Insights podcast to discuss the fundamentals, supply dynamics and banking sector changes that are lining up to form a compelling case for European bank capital.
We asked Marc:
- What are coco bonds and what can they offer investors?
- The evolution of banking regulation has a huge influence on the investment case for cocos – do you think future changes will be positive or negative for the asset class?
- We’ve seen cocos go from zero to become an asset class worth over USD200 billion in just five years. What does this rapid growth mean in terms of bond supply?
- We’re hearing investors becoming nervy about buying into cocos for fear they’ve missed the top of the market – do you think this is a valid concern or is there more upside to come?
- How are you looking to capture these alpha opportunities through 2020?
- What are the three main risks currently on your investment horizon?
- What are the key differences between European AT1s and US preference shares (prefs)?
- We’re seeing ESG factors influence all asset classes across the bond universe – what are the key points to note in the cocos market and how do you integrate ESG factors when you invest?
My-Linh, Head of ESG Investment Risk, joins us on the BlueBay Insights podcast to discuss climate change, rising client interest and industry action points for smart and sustainable ESG investing.
My-Linh answers
- Are you seeing elevated interest from BlueBay investors regarding climate change and ESG as a whole?
- What can the asset management industry do to make a positive impact over the next decade?
- Are you seeing the industry make cultural changes to allow ESG-led ideas to overwrite the old ways of doing things?
- ESG has always been a part of the BlueBay investment approach, but what are we doing to make it even more of a priority?
- Which ESG investing focus areas do you see gaining prominence over the next 12-months?
Global growth is at point of positive inflection.
The dovish pivot by global central banks and policy easing by Beijing; the de-escalation of the US-China trade war and reduced Brexit uncertainty; and end of the inventory correction in manufacturing will support a pick-up in global growth relative to the US in 2020.
Risk premiums in lower rated credit and growth-sensitive assets, including emerging market currencies and corporate credit, will in my view decline as fears of recession fade.
But with mediocre growth and high debt, the global economy is vulnerable to negative shocks.
investors will continue to seek safety and diversification in core fixed income and investment-grade credit.
The search for yield is forcing investors to take on more risk. In credit, bottom-up credit selection and strategies unconstrained by benchmarks tied to single geographies and asset classes will remain popular.
Investors are also turning their attention to the grey rhinos – high probability and high impact risks from climate change and social instability. ESG investing is not a fad.
The dilemma facing investors as 2020 begins is to balance the pick-up in global growth with valuations of many assets at historic highs.
2019 was the year of the rally in everything. 2020 will reward the discerning and the bold.