Market Update

As the third quarter of 2024 comes to a close, TwentyFour Asset Management's Aza Teeuwen reflects on what this has meant for the Asset-Backed Securities (ABS) team. Not only were volumes across European ABS elevated throughout July and August, we also saw €34 billion in primary issuance – a significant increase from previous years.

Chris Bowie at TwentyFour Asset Management describes the third quarter of 2024 as a significant turning point in fixed income markets, marked by the Federal Reserve (Fed) cutting interest rates by 50 basis points (bps) for the first time in many years. This followed an earlier 25bp cut by the Bank of England (BoE), setting the scene for further rate cuts over the coming years.

With cracks starting to show in the US economy, many are wondering whether tight corporate bond spreads leave investors vulnerable. But with corporate balance sheets holding firm and yields on higher quality bonds looking attractive, staying invested in credit should continue to reward investors.

Eoin Walsh delivered the keynote address at TwentyFour Asset Management’s Annual Conference in London on September 10, 2024.

TwentyFour Asset Management's Chris Bowie discusses the underweight duration across all of our outcome driven strategies, how this phase is now coming to an end, and why we are beginning to increase our interest rate duration in all of our funds.

Positioning and fixed income markets have remained quite tricky this year, however credit markets have continued to perform very strongly. TwentyFour Asset Management's Eoin Walsh, discusses why he thinks there is opportunity within European credit despite the rate headwinds and pull back on some of the aggressive rate cutting expectations markets had at the start of the year.

TwentyFour Asset Management’s Chris Bowie, takes a closer look at how he is thinking about duration within fixed income portfolios and shows how following conventional wisdom on duration might prove costly for some investors this year.

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

2023 proved to be a second year where European ABS gave investors the strongest returns in fixed income with the benefit of very low volatility. As risk-free rates grew to what we expect to be the peak, income was maximised whilst the various market pivots on rates came and went in the rear view mirror.

The TwentyFour Advent Calendar is a collection of 24 stats telling the story of fixed income and markets this year. The calendar covers everything from interest-rate rises and record bond issuance to falling house prices and disappearing banks.

While bonds are once again finding their feet, investors have found themselves sitting on cash balances of 30% to 50%. This capital preservation trade has made perfect sense, but does it still make sense as we reach terminal rates?

It is our view that without a doubt 2022 was a year to forget for the bond market. Whether you held government bonds, high end corporate credit or riskier high yield paper, you would have taken a knock as steep increases in interest rates across the globe sent bond prices tumbling.