Investment grade credit

Despite ongoing market volatility and geopolitical uncertainty, 2023 could bring attractive opportunities for fixed-income investors, says Barney Goodchild.

James Vokins and Chris Higham from our credit team believe the path of inflation will remain the central question for investors in 2023. Fixed-income investors should remain cautious until that path is more certain, but fundamental analysis can still uncover attractive opportunities.

After a bruising 12 months, our emerging-market debt team anticipates an improvement in the asset class’ fortunes in 2023 as declining inflation allows central banks to ease back on monetary tightening. But with many issuers still at risk of default, investors will need to tread cautiously.

Macroeconomic forces have been key drivers of performance in the global high-yield market in recent months, but 2023 is likely to bring a renewed focus on issuer fundamentals, say Sunita Kara and Brent Finck.

Siddhartha Bhattacharyya, Iain Forrester and Matthew Raque from our buy-and-maintain credit team discuss the impact of the current environment on portfolios, where they are finding value, and how they are integrating these considerations in their net-zero plans.

After the volatility that rocked UK markets in recent weeks, Alastair Sewell reflects on how this impacted money market funds and what’s next.

Pessimism was in the air at the recent IMF/World Bank meetings, with emerging markets looking vulnerable to a tightening of global financial conditions. However, their orthodox policy responses should put many countries in a stronger position to meet those challenges than previously, argue Carmen Altenkirch and Nafez Zouk.

Recent events in the UK are a reminder of the benefit of a globally diversified sovereign bond allocation and avoiding home bias, as Jennie Byun, Kurt Knowlson and Steve Ryder explain.

Shawn Mato discusses recent developments in the convertible bond market with Rico Pedrett.

In this month’s instalment of our visual series on topical themes, we look at some of the biggest recent trends in EMD.

Will new climate legislation accelerate the transition, or will the energy crisis hamper it? Thomas Chinery and Justine Vroman assess the implications for strategically positioned bondholders.

European regulators are set to introduce significant reforms to money market funds. Investors need to be ready, says Alastair Sewell.

Despite spread widening, defaults in the high yield market have yet to hit significant levels. Will structural changes in the market limit the damage from defaults in future crises?

Emerging markets have been hit by stern economic challenges in 2022. But many companies are proving resilient thanks to strong fundamentals, as our emerging market corporate debt team explain.

Beijing’s ideological battle to stamp out COVID-19 appears increasingly misguided as the rest of the world learns to live with the virus. But the impact of China’s approach will be felt far beyond its borders.

In this month’s instalment of our visual series on topical themes, we look at whether the global economy is heading towards stagflation.