Trending with Institutional Investors

Investment Grade Credit

The articles on this page reveal the topics that are receiving the most traffic from investors inside RFPnetworksTerminal, within one sub-asset class.

Each article summarises the key themes that investors are researching based on their engagement with content and or their search queries for that topic. These can be early signals of portfolio changes or new searches.

Fixed Income
April 2023

Which European Investment Grade Asset Manager?

Uncovering New Alpha Sources

RFPnetworks Investment Grade Credit Research depicted by man in hoody with chalk board behind him with flexed arms.

The Case for New European Investment Grade Bond Managers: Asset manager selectors to spend more time researching new managers that can tap into alpha.

Whilst fixed income portfolios have had a tough year, everything is relative. When it comes to fixed income asset allocation, that is often measured by the z-score. And as things stand today, this metric is leading both US and European investors to look closely at European Investment Grade Credit.

This comes at a time when the ECB has pushed out another rate rise at its March meeting. This was in line with market expectations. But the new dovish tone in delivery has the market believing the second half of 2023 may be brighter. The path to which require smaller rate rise steps. Followed by a pause ahead of peak inflation to accommodate the impact lag of tightening, and therefore reduce any unnecessary burden on the economy.

In other words, fixed income manager selectors are interested in allocating more to European Investment Grade Credit today, but are being selective on the managers they talk to. And in particular, focusing on the managers that can deliver high quality credit portfolios, with the highest spreads for the lowest default risk as the recession creeps in.

But differentiating the European Investment Grade Universe of Investment Managers is not easy. Par for manager selectors is often equivalent to enough alpha to cover the management fees. But in today's market, the opportunity to generate even more alpha is becoming seductive, necessary, but also possible - depending on the investment managers you find.

At this stage in the credit cycle, sector dispersion is large. And with so many unknowns ahead, that cross-sector relative value may grow wider. And even more so across the issuers within the sectors themselves. Deep credit research and selectivity are always important at every stage of the cycle. But not necessarily for the same reasons. Todays those reasons are clear. Risk mitigation and alpha maximisation.

Thought Leaders
Investment Grade Credit
Thought Leaders
Investment Grade Credit

After the dust settles in the AT1 market

In the past decade or so the additional tier one (AT1) market has experienced occasional semi-cathartic events that naysayers jumped on to pronounce that the market is dead. Of course, this was never true, just as it isn’t true this time. It usually ends the same way – with some unfortunate casualties, but also plenty of opportunities.
Aegon Asset Management logo on RFPnetworks
Aegon Asset Management
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