Investment Grade
Our Investment grade funds aim to deliver consistent risk-adjusted returns by limiting their investment universe predominantly to securities deemed to be higher quality and at a lower risk of default.
Investment Grade Quarterly Update – April 2024
Following the aggressive rates rally at the end of 2023, Q1 saw notable gains, with inflation surpassing expectations. Johnathan Owen, Portfolio Management, highlights a more promising inflation outlook and its implications for the Investment Grade team.
Key takeaways:
- Inflation trends: Inflation in the Eurozone and the UK remained more orderly compared to the US
- Rate cuts: Markets expect rate cuts from the Federal Reserve (Fed), Bank of England (BoE) and European Central Bank (ECB), with the ECB first to begin their cutting cycle in June
- Labour market: Unemployment in the US ticked up to 3.9%, yet the labour market remains tight
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Yields: Yields in investment grade continue to look attractive, strong positive annual returns are possible even in a scenario where rates and credit spreads rise
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