Video: Opportunities for fixed income investors across tight credit spreads and high yields
As the Fed continues to cut interest rates, Head of Investment Strategy Asia Ben Bennett and Mat Rees, our Head of Global Bond Strategies look at opportunities for fixed income investors to drive returns.
With credit spreads near historic lows, but total yields remaining attractive for many investors, the bond market is increasingly becoming one for stock pickers, searching out areas that could still generate attractive returns. Mat Rees and Ben Bennett discuss these pockets of value – from European credit to emerging market high yield and even relative value interest rate positions.
In first of a three-part series, they discuss:
- Possible trajectories for bond yields and spreads over the next six months
- The chances of a ‘soft landing’ in the US, interest rates remaining higher for longer, and a recession setting in
- Possible policy directions for the major central banks
- What they see as the relative attractiveness of European credit over US credit
The conversation also covers the difference between managing unconstrained absolute return bond strategies and benchmark based ones. While the best ideas can be applied across both types, the sizing and universe of investments may differ.
Key risks
The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested.
Whilst we have incorporated ESG information into investment decision making and stewardship practices, there can be no assurance that any responsible investing goals will be met.
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Ben Bennett
Head of Investment Strategy, Asia
Ben joined LGIM’s London team in 2008, initially focusing on credit strategy before taking on the role of Head of Investment Strategy and Research, coordinating LGIM’s research from long-term themes to short term market drivers. He also chaired the monthly investment macro meeting for many years, a key input for portfolio risk across the active strategies. He relocated to Hong Kong in 2020, joining the LGIM Asia Board as a Director and was appointed Head of Investment Strategy, Asia, to help grow LGIM’s investment business across the APAC region. Ben started his career in 1999 as a credit strategist at Dresdner Kleinwort Benson in London, before performing the same role at both BNP Paribas and Lehman Brothers. Ben holds an MA in Mathematics from Queens' College, Cambridge University.
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