Perspectives Blog

How bad is China’s credit crisis?

Weili Jasmine Huang, Senior Portfolio Manager | February 3, 2014

me haircut in interest payment. It is believed that the costs will be shared among CCT (issuer), ICBC (distributor) and the local government involved in this business (implicit guarantor). In recent years, China’s trust sector has been one of the fastest growing types of non-bank credit, or “shadow banking” credit, to circumvent the government’s bank loan quota system. Currently, overall trust assets are about Rmb 10 trillion (U…

Parental income, not assets, affects college financial aid

Columbia Management, Investment Team | May 29, 2013

The factors that affect needs-based financial aid for college are often misunderstood. The “Expected Family Contribution” is determined predominantly by parental income, not parental assets — such as savings in 529 plans. A separate savings vehicle, not in the name of the child, may be the most advantageous in the financial aid formula. One of the biggest misconceptions about saving for college is the impact that assets may h…

Rebalancing the U.S. economy

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | January 13, 2014

…rter and looks to decline to something near 3% this year. Receipts are up 13% and outlays are down 5.5% in the last year—this is admirable progress. The easing fiscal drag will add to GDP via less subtraction. Indeed, private sector real GDP growth (GDP less government expenditures) is up 3% in the last 12 months versus overall real GDP at 1.7%. With the fiscal drag receding, monetary policy will also begin to normalize, providing less accommodat…

Biotech’s beneficiaries: How outsourcing is improving the sector and spreading the wealth

Aaron Reames, Senior Equity Analyst | February 24, 2014

Conditions favor biotech outperformance of broader markets for at least a few more quarters. Outsourcing offers biotech firms varied advantages, from cost reduction to enhancing credibility. The sector’s success and the outsourcing trend is fueling ancillary businesses, notably specialty REITs, CROs and research tools companies. As biotech indices continue to surpass all-time highs, one must contemplate if there is additional room to run. We c…

Quality milestone in the European recovery story

March 17, 2014

…nce in banking and telecoms. By Paul Doyle, Head of Europe ex. UK equities and Frederic Jeanmaire, Fund Manager, Threadneedle Investments After 18 consecutive negative months, the flow of eurozone bank loans into the private sector finally turned positive in January. This marks a milestone on the path towards Europe’s economic recovery. The turning point in the continent’s fortunes was July 2012 when European Central Bank (ECB) President Mario D…

Is Japan’s economic rebound for real?

Daisuke Nomoto, Senior Portfolio Manager | May 23, 2013

…atalysts to produce the next move higher in the stock market: Growth initiatives from the government to be announced next month which include putting together a policy to address the financial imbalances among the government sector, corporate sector and household sector, Reinforcement of popular support for the government’s mandate (The LDP’s presumed victory in the upper house election in July), Decision of government pension funds to increase…

The role of income inequality

March 3, 2014

The rise in income inequality was a root cause of the U.S. financial crisis and the slow post-recovery period. Mediocre income gains for middle income households have contributed to the slow recovery of U.S. consumption and economic growth. As pressure continues to build to address income inequality, we expect the government to lead on this issue and private sector to lag. By Marie Schofield, Chief Economist and Toby Nangle, Head of Multi asse…