The tide turns

As COVID-19 sweeps across the world, a contraction in global growth is causing an adverse short-term reaction to the economy and financial markets. While the extent of contagion from public markets to private debt remains unclear, transactions with strong downside protection should remain more resilient through the crisis, explains Nikhil Chandra.

In the latest of our editorial series, Link, AIQ brings members of Aviva Investors’ investment strategy, equity and debt teams together to discuss the prospects for financial markets and the world economy in the face of the coronavirus epidemic.

UK investors considering whether to allocate to global investment-grade credit may discover the broader diversification benefits can significantly improve a portfolio’s overall risk dynamics.

Sunil Krishnan asks whether higher-yielding fixed income assets remain good diversifiers for multi-asset portfolios in the current environment.

Following a series of IMF meetings in Washington, D.C., Carmen Altenkirch and Dariusz Kedziora discuss their views on how reform prospects may shape emerging market debt.

Climate risk has become a critical business issue, but a recent consultation by the European Insurance and Occupational Pensions Authority highlights confusion on how to assess it.

In the strongest signal yet that central bank policies are upending the investment playbook, sub-zero conditions are extending to the high yield market for the first time. Sunita Kara, looks at the implications for investors.

Green bonds can be a powerful tool for attracting investment in environmental projects, but reforms are needed to promote further growth of the market, argues Colin Purdie.

Christine Lagarde has been nominated to head the European Central Bank at a difficult time for monetary policy given growing fears of a recession in the euro zone. Despite much debate on her credentials, Stewart Robertson argues she is the right candidate for the job.

With China set to dominate EM equity indices over the coming decades, investors need to adjust their approach to the asset class, argues Alistair Way.

The Italian government remains on a collision course with Brussels despite recently striking a deal over its 2019 budget. A mis-step by either side could lead to a fresh euro zone crisis that the new head of the ECB might struggle to contain.

The emerging market debt universe offers investors an expanding pool of opportunities that may be better assessed when integrating environmental, social and governance factors.