Since the global financial crisis, the notion of what constitutes an appropriate liquidity management and capital preservation strategy has become a source of heated debate among professional institutional investors and retail-oriented allocators alike, with varying opinions on how to balance a preference for returns against the need for immediate liquidity and capital preservation.
After 25 years of steady economic growth, Australia is on the verge of wresting bragging rights from the Netherlands for the longest period on record without a recession. While this historic event should be celebrated, the future may not be as rosy.
An active approach to the complex, fragmented municipal bond market may help investors avoid several common drawbacks of passive strategies.
Equity market peaks (and troughs) are impossible to identify in advance. But this doesn’t mean that equity investments should simply be “set it and forget it.”
The Federal Reserve hiked rates as expected at its meeting on 13–14 June 2017, and it made news by providing important details about its plans to normalize its balance sheet. However, one crucial detail the Fed did not provide: when it will commence that process of balance sheet normalization.
Normalization of the European Central Bank’s (ECB) monetary policy never was a question of “if” but one of sequencing, timing and calibration. Financial markets reacted to ECB President Mario Draghi’s speech in Sintra this past week in a way suggesting the ECB might change all three of those policy normalization parameters.
There has been a lot of discussion about a recent academic paper, "Why Indexing Works," which makes a statistical case for passive investing in equities. The same logic applied to bonds, though, may make the opposite case: Passive fixed income management doesn't work, but active bond management does.
Just as the global economy faces a number of important pivot points that investors should look for over the next several years, so some domestically generated pivot points will shape the UK economy in the coming years – largely stemming from UK politics.
The effort to repeal and replace “Obamacare” hit yet another stumbling block this week when U.S. Senate Majority Leader Mitch McConnell decided to pull the bill from consideration after realizing he did not have sufficient votes for it to pass.
The global economy faces several potential pivots in the direction and scale of monetary, fiscal, trade, geopolitical and exchange rate policies. One in particular will help determine the long-term outlook for China and emerging Asia.
According to the Global Sustainable Investment Alliance, over $22 trillion of assets were managed under responsible investment strategies globally in 2016, up 25% from two years before. This is one of many statistics showing Environmental, Social and Governance (ESG) investing moving into the mainstream. We see 10 major trends contributing to the rise.
This is an exciting time to be an investor, but it’s also a very uncertain one. Risks to both the upside and downside are much higher than they were even a year ago.
The U.S. bond market’s post-election optimism has now evaporated: The 10-year nominal U.S. Treasury yield has dropped by almost half a percentage point from its mid-March 2.62% post-election high, with lower implied inflation rather than lower real yields accounting for most of the decline.
Why falling commodity prices may not upend the EM rally.
Another soft U.S. core Consumer Price Index (CPI) inflation report – the third in a row that has lagged expectations – could complicate the Fed’s intentions to raise rates one more time this year, as the central bank’s Summary of Economic Projections currently forecasts.
Market participants increasingly expect the Federal Reserve to begin unwinding its balance sheet during the second half of 2017, and many have speculated that the agency mortgage-backed securities (MBS) market – and the U.S. housing market more broadly – could suffer as a result.
Political risk, reform efforts and potential monetary policy shifts cloud the outlook for China, Europe and the U.S.
New equity offerings can garner media buzz. Think of recent initial public offerings (IPOs) by Snapchat, Alibaba and Visa. Business media enthuse, investors clamor, and share prices often rise, at least initially.
A review of last month’s market-moving events across countries and asset classes
With the probability of recession sometime in the next five years around 70% in our view, now may be a critical time to prepare for when the cyclical tailwind that began last year begins to fade. Over the next five years, the global economy may undergo five significant pivots in the direction and scope of monetary, fiscal, trade, geopolitical and exchange rate policies. Are investors too optimistic about the future economy? We address this and other crucial questions in PIMCO’s 2017 Secular Outlook – our long-term view for the global economy and markets.
The minutes of the May Federal Open Market Committee (FOMC) meeting, released Wednesday, provided (as expected) more information on the committee’s thinking about how and when to start the policy of normalizing the size of the Federal Reserve’s balance sheet.
In its recent quarterly inflation report, the Bank of England gave the market some fascinating insights into the challenges it will face in setting appropriate monetary policy over the coming years.
How can equity investors address the triple threat of a low return environment, scarcity of alpha and the tendency to chase performance?
When evaluating investment strategies it’s critical to understand the nature of the leverage being used.
Why understanding Environmental, Social and Governance (ESG) factors is critical for credit analysis of European utilities.
The oil market outlook is always a bit complicated, in part due to the impact OPEC can have on balances. For all the attention paid to changes in U.S. shale output, OPEC is capable of swinging oil balances more in a single month than U.S. shale can in a year.
Active management has the potential to provide diversification, generate income and mitigate the risks of higher inflation and rising rates.
In many ways the filings may mark “the end of the beginning” (as Churchill once said) of this chapter for Puerto Rico.
Unlike in March, April’s soft inflation across a range of core goods and services prices cannot be explained away by large, one-off price adjustments or other quirks in the data.
In this issue, Research Affiliates offers insight into its CPI-based secondary return benchmarks, its business cycle modeling and continued opportunities in emerging markets.
A review of last month’s market-moving events across countries and asset classes.
Centrist candidate Emmanuel Macron will be inaugurated as the next French president on 14 May, thanks to a clear win in the second-round runoff against the far-right candidate Marine Le Pen.
Brazil is often known for soccer, samba and pristine beaches. Among investors, something else also stands out about Brazil: double-digit interest rates that are significantly higher than its peers’ (see chart). That may soon change.
A bottom-up look at major industries around the world reveals significant potential for productivity growth.
When it comes to credit investing, we believe passive investors are implementing a suboptimal strategy and may be leaving money on the table as active management offers several potential advantages.
By focusing so intensely on U.S. political developments, investors risk missing a silent shift in what has arguably been the strongest driver of global reflation in the last five years:...
The Federal Housing Finance Agency’s proposal to increase liquidity and reduce costs to taxpayers could actually lead to reduced liquidity and higher mortgage rates.
Looking at several metrics – legislative achievements, staffing in key areas and executive orders – President Trump’s first-100-day track record has been mixed.
Though uncertainties remain, we have a broadly positive outlook for commodities in the next year.
PIMCO expects no policy changes at the ECB Governing Council meeting on Thursday, aside from a minor adjustment to the bank’s outlook for growth. We think ECB President Mario Draghi will repeat the message that although the economic recovery is gaining momentum...
Many investors are concerned about the risks to growth and the potential for higher inflation in Peru following two recent shocks.
Markets breathed a sigh of relief today as the moderate centrist candidate Emmanuel Macron qualified for the second round of the French presidential election in two weeks, together with the far-right anti-establishment candidate Marine Le Pen.
If you had asked that question at the end of February this year, you could have plausibly pointed to two key factors to explain the drop in volatility. First, the U.S. equity market (as measured by the S&P 500) had rallied 10% since November’s surprise election of Donald Trump – and rallies in equities typically are accompanied by drops in volatility.
Ask an investor if most active bond funds outperform their passive counterparts and the response is likely to be "no."
Don’t get too excited about the recent rise of headline U.S. inflation above the Fed’s target.
The way in which the Fed normalizes its balance sheet will have important implications for markets.
We are now more confident in our baseline view that the global economic expansion will be strengthening and broadening over our cyclical horizon.
It’s hard to imagine a more challenging decade for income investors than the past 10 years. It was bookended by the great financial crisis and the surge in populist politics that led to the election of Donald Trump as U.S. President.
The Federal Reserve faces three complications to removing monetary policy accommodation.
