Fixed Income

This week we have seen the continuation of a remarkably strong technical in the credit markets. At the time when S&P 500 index was selling off by nearly 2% on the day, while government bonds were also in the red, spreads in Additional Tier 1s (AT1s), which always represent a higher beta product in the corporate bond universe, were barely changed.

With spreads well below long term averages and government bond curves pricing in what central banks are likely to do in the next few quarters, opportunities for capital gains through spread compression or sustained rallies in government bonds appear to be limited.

TwentyFour Asset Management’s Felicity Juckes shares her take on volatility in Q4 and why we remain optimistic on credit heading into 2026.

TwentyFour Asset Management’s Gordon Shannon explains how resilient US economic activity and evolving Federal Reserve dynamics shaped Q4 and why we remain focused on high-quality credit heading into 2026.

TwentyFour Asset Management’s Douglas Charleston highlights 2025 as another year in which European ABS delivered solid positive returns over risk-free rates, with lower-than-expected volatility despite ongoing geopolitical uncertainty.

The new year has begun with a jolt for market participants after the US carried out a military operation in Caracas over the weekend, capturing Venezuela’s president Nicolas Maduro and his wife.

It is the nature of financial markets that the trends and risks investors have their eye on at the start of the year are seldom the trends and risks they have their eye on by the end. Below is a selection of charts depicting some key trends we have seen develop in 2025, all of which we believe will have implications for investors heading into 2026.

As we approach the end of a year that has seen risk assets shrug off US tariffs and mounting concerns over AI-driven tech valuations, TwentyFour Asset Management’s portfolio management team selects the seven key questions that they believe will define 2026 for fixed income investors.

For much of the past year, the AI story in markets has been one of unrestrained optimism. Firms have been racing to spend on chips, infrastructure, and data centres, and equity valuations have generally rewarded those with the boldest capital expenditure plans.

October brought the first serious bout of volatility in corporate bond markets for some time, with two high-profile US bankruptcies raising fears of a more systemic issue in credit.

Amid tariffs, bankruptcies, and uncertainty, credit fundamentals remain strong. Elevated yields and solid corporate balance sheets favour income-focused fixed income strategies over government bonds, even as volatility persists.

The Net Zero Banking Alliance (NZBA) has formally ceased operations as a member-based organisation, following a vote by its remaining members. This marks the end of what we believe is one of the most significant collective efforts to align global banking with the goal of net zero emissions by 2050.