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Positioned for Opportunistic Yield Capture Across Global Fixed Income Markets
Radio Feature 136: Sona Blessing in conversation with James Waters
 
Thursday, May 04, 2017

radio As a Fixed Income Client Portfolio Manager at Columbia Threadneedle Investments (which as of 31, December 2016 managed EUR 178.8 billion across all fixed income portfolios) James Waters is responsible for the client portfolio management function across all fixed income strategies and is head of the fixed income client portfolio management team.

In this podcast he shares:

  • - Their current outlook on fixed income investing is asymmetric - i.e. the upside is limited
  • - In the context of corporate leverage - the US and Europe are moving in different directions
  • - That euro spreads are no longer rich and that euro funding is no longer cheap
  • - An active manager could add value in:
    Investment Grade Credit
    For e.g.: With a preference for late cycle defensive sectors and high quality credit - such as regulated utilities; being underweight the Eurozone (e.g. Italian banks), etc.
    High Yield
    For e.g. by maintaining a neutral to small underweight portfolio beta with generally defensive sector orientation, etc.
    Emerging Markets
    For e.g. by focusing on specific country improvements/turnaround stories; by disliking countries with greater current account deficits, etc.
  • - From a spread blow-out perspective why they have a preference to hold higher quality - sovereigns, and emerging market credits, with a shorter duration.

  •  Download this feature as MP3 (19.23 MB)

 
Listen to the complete feature
Positioned for Opportunistic Yield Capture Across Global Fixed Income Markets

Duration: 13:59 

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Or listen to selected sub-features
  • Q1 - What is your outlook on investing in global debt - could you elaborate in the context of its quality and duration?

    Duration: 01:32 


  • Q2 - How much of the expected yield, in the context of the above, is conditioned by, for e.g. political risk vs. fundamental economic perspectives?

    Duration: 02:12 


  • Q3 - Could you share specific examples in each case: across geographies, credit ratings, duration, currencies. How can an active asset manager add value?

    Duration: 02:33 


  • Q4 - How do active fixed income asset allocations compare with being invested in their passive instrument counterparts, and hybrid products?

    Duration: 01:23 


  • Q5 - Would you agree that we have broadly been witnessing a downturn in debt issuance? Do you expect this to persist and how do you see it impacting return expectations?

    Duration: 01:08 


  • Q6 - What are your thoughts on investing in infrastructure related, and other long term dated debt instruments? Have you identified other areas within the debt investment landscape that lend themselves to risk-adjusted yield capture?

    Duration: 01:32 


  • Q7 - How could/Where should - an investor be positioned to benefit from potential spread blow-outs in the short to medium term? And how should they be hedged? What is the cost of such hedging?

    Duration: 02:05 


  • Q8 - For how much longer do you anticipate the “risk-on” trade (favouring equity investing) to dominate asset allocation? When, where and why would you expect dislocations?

    Duration: 01:33 



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