investment viewpoints

Fixed income: capturing the comeback

Fixed income: capturing the comeback
Yannik Zufferey, PhD - Chief Investment Officer, Core Business

Yannik Zufferey, PhD

Chief Investment Officer, Core Business
LOIM Fixed Income team -

LOIM Fixed Income team


High yields, resurgent carry and supportive pull-to-par dynamics are boosting potential returns across fixed-income markets. In the Q4 issue of Alphorum, we build a constructive case for active, forward-looking investment – with a focus on investment-grade and crossover credit – while taking stock of growth, inflation and energy-price pressures. Key points include:

  • Bonds are back in favour. Our lead commentary assesses the opportunities for active investors to exploit the yields and carry on offer while navigating macro risks, while our convictions dashboard reflects our current risk appetite across market sectors
  • Following this year’s sell-offs, our systematic research team analyses the prospects of key LOIM strategies – Fallen Angels, TargetNetZero Global Investment Grade, Crossover Credit and Global Fixed Income Opportunities – under four scenarios ranging from a soft landing to stagflation. In all but the harshest environment, the results are encouraging
  • Our global government and inflation-linked bond team is proceeding cautiously as macro conditions could foment more volatility. Slowing growth, sticky inflation and rising rates will test companies, but spreads on corporate credit – especially in the investment-grade market – more than compensate for defaults projected in the next 12 months
  • As the market focuses on growth, inflation and policy moves, sustainable fixed income continues to make progress. LOIM’s Implied Temperature Rise methodology shows that, since May 2021, US firms account for three-quarters of the increase in issuers worldwide who have set robust emissions-reduction strategies aligned with the Paris Agreement


For more, read the Q4 issue of Alphorum using the download button provided.

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