All insights

This brief paper outlines our approach to absolute return, and why we think a predominantly long-only fund can offer investors the predictability and transparency that they demand through the investment cycle.

Today marks the start of a very busy week for participants in the US Treasury market.

After a volatile fortnight in the market, we appear to be closing this week in a relatively calm manner.

Our base case for rates markets is a gradual shift higher, but there are reasons to consider why even our forecast is too constructive and the move higher could be more substantial.

Following Monday’s volatility in the rates market and the subsequent “meltdown” in US equities, which saw the Dow Jones falling by more than 1,500 points intraday; yesterday had a more orderly feel to markets, and ultimately the 3 major indices in the US, the Dow Jones, S&P 500 and Nasdaq, are all still in positive territory for the year to date.

To understand this breakdown in correlation we need look no further than the source of the risk: the answer, just like in May 2013 when Bernanke gave us his taper tantrum, lies in rising rates.

Yesterday, 10yr Gilts closed at 1.510%.  Whilst that individual yield level does not sound particularly significant, in a historical context it is possibly one of the most important month end closing levels I have witnessed in more than 25 years in the markets.

Chris Bowie discusses Q4 performance of the Outcome Driven strategy and provides his outlook for the rest of the year.

Mark Holman discusses Q4 performance for the Strategic Income strategy and provides his outlook for 2018.

Ben Hayward looks back at performance for Asset Backed Securities over the last few months and provides an outlook for 2018.

As we provide lots of commentary on the maturing economic cycles and monetary policy across the globe, we thought it was worth highlighting some points from Fitch’s recently published Global Housing Update and its useful insights into how the global housing markets are faring.

Our forecasts for longer dated government bonds were for yields to gradually rise during 2018, but not in an uncontrolled manner.