Education Hub

The goal of income investing is to ensure that your portfolio generates a steady source of revenue regardless of market conditions.

Fixed income managers always want to have the flexibility to look for the best value across their investment universe, and in our view they therefore need the capacity to buy bonds in different currencies.

Roll-down is the capital gain created by the natural fall in a bond’s yield as it approaches maturity. As a fixed income investor, it is probably the most you will ever get paid for doing nothing.

Inflation is widely understood to be bad for bonds. Fundamentally, this is because inflation erodes the value of the coupon and principal payments that fixed rate bondholders receive in the future. 

Bids Wanted in Competition (or BWIC) lists are a unique characteristic of the ABS and CLO markets, where they are widely used in secondary trading when investors are looking to sell bonds.

Hedging currency or foreign exchange (FX) risk is a key decision for any manager running a diversified fixed income portfolio. Currencies are inherently volatile, so whether and how FX risk is managed can have a material impact on a portfolio’s risk and return profile.

Bond prices and yields move inversely to each other – as a bond’s price falls, its yield rises, and vice versa. 

Duration is often said to measure a bond’s sensitivity to changes in interest rates, because it describes what is likely to happen to a bond’s price for a given change in the bond’s yield. 

Corporate hybrids are a type of bond issued by companies – they are known as hybrids because they combine certain features of debt and equity.

Asset-backed securities (ABS) are a type of bond, typically issued by banks or other lenders. What makes ABS different to conventional bonds, such as government or corporate bonds, is that they are ‘secured’ against a diversified pool of loans with similar characteristics.

Additional Tier 1 bonds (AT1s) are part of a family of bank capital securities known as contingent convertibles or ‘Cocos’. Convertible because they can be converted from bonds into equity (or written down entirely), and Contingent because that conversion only occurs if certain conditions are met, such as the issuing bank’s capital strength falling below a pre-determined trigger level.

Collateralised Loan Obligations, or CLOs, are bond instruments issued to fund a specific pool of loans, typically senior secured or ‘leveraged’ loans, to companies. The bonds are split into tranches that can carry different ratings (and yields) according to how senior they are in the CLO’s capital structure, normally from AAA notes at the top to equity notes at the bottom.

Corporate hybrids are bonds issued by companies that combine characteristics of both debt and equity.

Additional Tier 1 bonds, or AT1s for short, are part of a family of bank capital securities known as Contingent Convertibles or ‘Cocos’. They are bonds issued by banks that contribute to the total level of capital they are required to hold by regulators.

European collateralised loan obligations – or CLOs – are bonds issued to fund a specific and diverse pool of corporate loans to firms of different sizes and in different industries all over Europe.

Residential mortgage-backed securities (RMBS) are an under-utilised asset class for many investors, despite boasting some of the lowest default rates across the global fixed income market and offering higher yields and greater investor protections than vanilla corporate bonds of the same rating.

George Curtis (Portfolio Management), from our Multi-Sector Bond team provided a comprehensive understanding of the key aspects of yield curves.

Douglas Charleston (Partner, Co-Head of ABS) and Pauline Quirin (Portfolio Management), from our Asset-Backed securities team provided a comprehensive understanding of the key aspects and trends within the Significant Risk Transfer (SRT) market.

In this Back to Basics webinar, Gordon Shannon (Partner, Co-Head of Investment Grade) and Johnathan Owen (Portfolio Management) from our Investment grade team provided a comprehensive understanding of the key aspects of corporate hybrids.

In this Back to Basics webinar, Jakub Lichwa (Portfolio Management) from our Multi-Sector Bond team gave their valuable insights into the importance of maintaining sufficient levels of bank capital to uphold financial stability.

In this Back to Basics webinar, Aza Teeuwen (Partner, Co-Head of ABS) and Elena Rinaldi (Portfolio Management), provided a comprehensive understanding of the key aspects and trends within the European CLO market.

In this Back to Basics webinar, Aza Teeuwen (Partner, Co-Head of ABS) and Douglas Charleston, (Partner, Co-Head of ABS) provided a comprehensive understanding of the key aspects and trends within the European RMBS market.