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European ABS primary markets have started 2021 at the solid pace that most market participants expected. The market saw a patchy Q4 in which activity petered out early, not helped by the dominant UK market suffering some hesitation whilst tightrope Brexit deal talks went to the wire, but also as a result of a rather more simple fatigue that appeared to have set in.

In this update, TwentyFour Partner and Portfolio Manager Ben Hayward addresses some of the key reasons he thinks investors should consider allocating to ABS sooner rather than later.

In our view the rationale for the premium is certainly weakening and, of course, we can no longer call it a ‘Brexit’ premium.

TwentyFour AM partner and portfolio manager Douglas Charleston discusses Q4 performance for ABS markets and provides his outlook for 2021.

For high yield issuers 2021 has started in a similar vein to 2020, with the technical backdrop providing an attractive environment for capital raising.

Our analysis indicates European ABS investors can carry forward little concern about nasty default surprises, and this is likely to be important when considering total returns for 2021.

At the moment CLO spreads are tightening, as they are right across credit. However, we haven’t had any CLO primary deals come to market so far in 2021, so we are operating in a bit of an informational vacuum, at which point these cross-asset class comparisons can be useful.

As we have said many times over the past few months, this cycle is likely to be remembered (among other reasons) as being exceptional for its unprecedented momentum.

TwentyFour Asset Management, the London-based specialist fixed income investor, has announced the appointment of two new partners from within its compliance and portfolio management teams.

The biggest mover so far this year in fixed income markets has been US Treasuries. The curve has bear steepened, with the short end remaining unchanged while longer maturities have sold off by anything between 10bp at the five-year point of the curve and just over 20bp in the 30-year.

Partner and Portfolio Manager Felipe Villarroel reflects on markets in 2020 before giving his inflation outlook for 2021

In his latest video, George Curtis discusses our views on high yield defaults over the last few months and what he thinks we can expect in 2021