Perspectives Blog

Ramifications of Republican romp

Robert McConnaughey, Director of Global Research | November 10, 2014

…r less constructive outcome. The primary economic risk from conflict across the aisles would be a reprise of the debt limit showdown. The current debt limit suspension will end in March 2015, and a debate over fiscal matters could devolve into another shutdown next summer. While we cannot completely discount such an outcome, we think that chances are very low. The broader backdrop to political posturing over the next two years will be the 2016 pr…

Emerging market equities — Still a world of opportunity

Georgina Hellyer, Fund Manager | December 1, 2014

Despite a disappointing last five years, the structural growth drivers that have long made emerging markets an attractive area in which to invest are as compelling as ever. While emerging markets may be a single asset class, they are anything but homogenous. This provides opportunity for active investors to seek out higher returns. There are an increasing number of world-class companies to choose from, with capable management, healthy balance s…

M&A in healthcare – Out with the old, in with the new?

Harlan Sonderling, CFA, Senior Healthcare Analyst | March 31, 2014

Recently the market has been quite optimistic about merger synergy promises. History suggests investors should be diligent about analyzing acquirers’ claims around merger benefits and returns. While attractive acquisitions may lie ahead, it is critical to continue to carefully evaluate acquirers’ strategies and claims. The “old” healthcare M&A In the “old days,” pharmaceutical Company A would announce its acquisition of Company B for stock…

QE worked, but not as advertised

Zach Pandl, Portfolio Manager and Strategist | November 3, 2014

…ers have pointed out, QE on government bonds can be thought of as changing the maturity structure of outstanding debt: the Fed buys bonds and “issues” short-term government liabilities in their place. Thus, at least in this one dimension, QE was economically equivalent to Treasury buybacks funded with bill issuance. History shows that these types of debt maturity changes tend to have small effects on bond yields—and in the U.S. they were in any c…

In the land of 7 footers, 6’8″ plays guard

Fred Copper, Senior Portfolio Manager | May 5, 2014

The expected real return on most “safe haven” assets is currently negative. Risk seeking behavior could result in a bubble encompassing all risky assets. While current indicators support a pro risk stance, we are prepared to change our positioning as market conditions dictate. There is a great deal of discussion currently about the likely emergence of asset bubbles in capital markets driven by hyper-stimulative central bank policy. However, we…

Comments on the effect on global markets from the Ukraine crisis

Mark Burgess, Chief Investment Officer, Threadneedle Investments | March 12, 2014

To date, the fallout from the Ukrainian crisis has been largely confined to the emerging market debt, emerging market equity and commodity markets. At current levels, emerging market local currency debt appears to offer value, although we expect both the hard and local currency markets to remain volatile in the short term. Emerging equities reflect concerns not only around Russia and Ukraine but also the weaker growth outlook in Brazil and China…

Q2 fixed income outlook – Hitting for the cycle

Gene Tannuzzo, CFA, Senior Portfolio Manager | March 31, 2014

We have started to reduce exposure to high-quality bonds with limited upside potential and high-yield bonds in which credit risk appears too aggressive. Following weakness last year, emerging market debt has posted gains this year, and we expect further strength ahead as volatility subsides. While we expect a flatter yield curve over the next few months as investors focus on the timing and pace of rate increases, we don’t think they should avoi…