In the wake of the Global Financial Crisis, all eyes are on dynamic, responsive funding strategies that can deliver long-term goals in a risk-aware way.
In this paper, we assess the potential risks associated with such a strategy by stressing capital requirements using spread-implied ratings.
Reaching for yield, which we define as buying bonds with wider spreads after controlling for sector and rating impacts, is a topic that frequently arises in the life insurance industry.
The authors discuss sustainable investing, highlighting why there is not trade-off between a focus on sustainability and the maximisation of profit.
Caught our eye: UK pension buy and maintain strategies could bring demand pressure to sterling corporate bonds
In an already tightly held market for sterling corporate bonds, even modest moves by UK pension funds to adopt buy and maintain strategies could create stiff competition for these assets.
Pension funds don’t face the many constraints that make buy and maintain strategies so well-suited to insurers, and can make use of these freedoms when designing portfolios to meet the liability-aware investment needs of pension funds.
While tariffs remain a concern, the key issue is the degree—which we deem moderate—of U.S. recession risk. The current global backdrop makes the U.S. dollar unlikely to strengthen. Earnings growth expectations are modest, valuations are undemanding
Our view over the past few quarters has been that EURUSD should be rangebound, as the cyclical outperformance of the US economy is offset by the eurozone’s relatively better balance of payments position.