Bonds make the world go round
By the turn of the 20th century, W.S. Gilbert’s famous expression, “love makes the world go round” infamously morphed into “money makes the world go round.” The latter withstood the test of time and was even cleverly adapted into a song for an American musical in the early 1970s: “Money...read more
It looks like I may have to hitchhike again when I go on my next trip to Midland, Texas to meet with some of the Permian companies that we hold in our portfolios. On my first visit there about six years ago, I wasn’t able to find a cab to take me from the airport to my hotel – but excitement and activity were at a fever pitch in the area at...read more
Given the volatility in the equity markets in 2016 we feel it’s time for an update on Signature Global Science & Technology Corporate Class. Coming into 2016 there was U.S. dollar headwinds, macro and political uncertainty. Credit spreads had moved wider on bankruptcy concerns linked to falling commodity prices and global central bankers...read more
Many markets for inflation-linked bonds (also referred to as “linkers”) were born out of investor demand for both the safety of government debt relative to comparatively more credit risky borrowers, as well as real income that is protected from the risk of higher inflation. Although the income potential has been gradually squeezed from these...read more
Managing global fixed income in a negative-yielding world
Bear with me for a second as I review some investors’ “favourite” (predominantly negative yielding) bond market: Japan. At the start of this year, the universe of Japanese government bonds yielded somewhere in the vicinity of 0.3%. Today, they yield -0.1%. That...read more
I’ve had enough of the military analogies for unconventional monetary policy, bazookas and all that. It’s time for something new to freshen up this dull global deflation story. I just watched the clip from the movie Pulp Fiction where John Travolta plunges a massive adrenaline shot into an unconscious Uma Thurman’s chest and thought, that’s...read more
Investors with long dated liabilities such as defined benefit pension plans and insurance companies are familiar with the use of long government bonds to hedge their interest rate exposure. The most successful of these organizations, have followed a disciplined approach to progressively add to their liability...read more
Political turmoil in the U.K. continues as predicted in a previous blog post. Until the Conservatives choose a new leader in early September, who is going to lead the Brexit negotiations and with what mandate and authority? It is at this time that we would expect Article 50 to be invoked, starting the formal negotiations on Britain’s exit. ...read more
We are one week from the Brexit vote and since writing on the subject two weeks ago, the “leave” campaign has gained momentum and appears to be ahead of the “remain” camp in most opinion polls. The accuracy of these polls is suspect and as such, the best pollsters are left saying the outcome on June 23 is a coin toss.
What we do know...read more
The U.K. Referendum, on whether to stay in the European Union (EU), vote will occur on June 23.
Market Impact: Greater long term uncertainty irrespective of the result, heightened volatility and higher risk premiums.
The “remain” campaigners are painting a dire economic picture if Britain leaves the EU while the...read more