Perspectives Blog

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

Fred Copper, Senior Portfolio Manager | May 5, 2014

…r each year for the next five years is a powerful incentive for investors to hunt for returns that will at least not be certain to lose money in real terms, even if that means dabbling in asset classes such as emerging market debt that until recently were considered too racy for a standard portfolio, or indeed buying stocks after six years of sharp gains. This risk taking behavior is an intentional and essential part of central bank policy. Post…

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…

The beginnings of a new moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 2, 2014

…China under the Xi Jinping leadership. Post the GFC, the Hu-Wen leadership in China rolled out aggressive and hastily implemented fiscal measures in a bid to prevent a sharp slowdown. Low return projects and local government debt issues followed, including the LGFV(2) issues that have been touted as a potential non-performing loan problem for the banks. Policymakers did manage to keep growth above 9% until 2011 (Exhibit 1), but sustainability wa…

The case for active bond management

Carl Pappo, Head of Core Fixed Income | August 25, 2014

…ng in out of index securities (affording us the opportunity to invest in portions of the market that the passive managers are restricted from considering), focusing on high yield corporates, non-agency mortgages and preferred debt. Columbia Management proprietary fixed income research and trading teams are an integral part of our bottom up approach; these deep and experienced teams are significant contributors to our security selection process an…

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…

Gut check: The outlook on fixed income

Colin J. Lundgren, CFA, Head of U.S. Fixed Income | February 24, 2014

…or performance can be explained as payback (reversal of strong inflows when the sector was in favor), concerns about tapering, China slowing and deteriorating growth prospects more broadly in EM countries. Countries in the EM debt market that suffered the most last year were those that ran large current account deficits and faced potential funding challenges when the Fed tapered (i.e., the so-called “Fragile Five” countries of India, Indonesia, T…

The Fed’s decision tree

Zach Pandl, Portfolio Manager and Strategist | October 8, 2013

…t be known for certain, but estimates from economists suggest a drag of about 0.25%-0.50% on annualized fourth quarter gross domestic product (GDP) for every two weeks the federal government remains closed. Needless to say, a debt ceiling crisis could have much more worrisome impacts on the economy if it leads to a missed payment on the government’s debt. If the standoff continues beyond this week it will likely increasingly cloud the U.S. econom…