All the Capital

The current, compressed, and rapidly changing credit cycle, which has experienced dramatic swings in economics, policy, inflation, and corporate fundamentals, has been anything but typical. With a backdrop like this, investors' and credit analysts' heads are spinning trying to keep up! In this episode, Janet Crowe and Brian Barnhurst, CFA, PGIM Fixed Income's Co-Heads of Credit Research, help us see the big picture in the underlying trends in corporate credit fundamentals, from earnings and leverage, to upgrades and downgrades, and more.

Host and Senior Portfolio Manager, Mike Collins, taps into the trio's collective expertise to help assess how well equipped the corporate bond market is to withstand a potential slowdown. The episode also answers some key questions, including: which industries are likely to be the winners and losers as we move forward?; and where are the risks and opportunities? Find out in this episode of All the Credit®!

Recorded on June 27, 2022.

Although the traditional asset allocation portfolio mix of 60% stocks and 40% bonds has been a widely adopted investment approach that has spanned decades, a lower interest rate environment coupled with the underperformance of equities and bonds, has investors questioning the validity of the 60-40 asset allocation model. While we also see this portfolio structure as flawed, it's not for the reasons that others have suggested.

In this episode, PGIM Fixed Income's Tom McCartan, FIA, CFA, Custom Multi-Sector and Multi-Sector LDI Portfolio Manager, and Tyler Thorn, of the multi-sector portfolio management team, shed light on why it's not the idea, but rather the objective and execution that is flawed, as these traditional models overly emphasize asset returns and asset volatility, rather than focusing more on investors' long-term outcomes.

Tom and Tyler explain why the low level of bond yields should not alter one's asset allocation mix, highlight the different types of risk premia available to investors, and dive into why investors should begin to shift away from near-term, asset-based targets to longer-term, outcome-based objectives. The duo concludes this episode by giving their suggestions on how investors can refine and realign their current portfolios to optimize their outcomes.

Recorded on May 17, 2022.

The global impacts of Russia's invasion of Ukraine are wide-ranging and include the global energy industry amidst the varied reliance on Russian oil and gas by European countries. With COVID-related supply shortages, the exacerbation of the shift away from traditional fossil-fuel-based energy investment, and higher housing, travel, and many food prices, conditions are increasing the need for tighter monetary policies while negative consequences for global demand are being realized.

In this episode of All the Credit®, we turn to Chief European Economist, Katharine Neiss, PhD and global energy analyst, David Winans, to guide us through the complexities of these events and the implications of powering down from Russian energy.

Katharine and Dave review vital facts around Europe's reliance on Russian energy, discuss the geopolitical and energy policy alternatives available to different countries (including the status of green energy initiatives), share their views on the resultant fiscal and monetary policy implications, and what this all means for global energy producers and distributors. Host and Senior Portfolio Manager, Mike Collins, CFA, also discusses some PGIM Fixed Income's key positions as we navigate this elevated macroeconomic tail risk environment and aim to generate alpha for our clients amid these uncertain times.

Recorded on April 8, 2022.

Credit fundamentals across most municipal bond issuers have improved markedly and may be more immune from some of the recent geopolitical events in eastern Europe and rising commodity prices relative to many corporate or sovereign credits. That, coupled with aging populations, a steady stream of daily retirements in the U.S., and increased demand for high-quality fixed income securities, especially tax-exempt issues, leaves the municipal bond market well supported.

In this episode of All the Credit®, host and Senior Portfolio Manager, Mike Collins, is joined by PGIM Fixed Income's Jason Appleson, CFA, FRM, Head of Municipal Bonds, and Lee Friedman, CFA, U.S. Investment Grade Corporate Bonds Portfolio Manager, to dissect the taxable and tax-exempt municipal bond market and discuss its evolution. The trio reviews some key characteristics of the broad municipal bond complex, highlights the fundamental trends amongst issuers, assesses the attractiveness of municipal bond valuations, and shares our best ideas and municipal positioning across our fixed income strategies.

Recorded on March 8, 2022.

Securitized products, sometimes referred to as structured products or, more generically, asset-backed securities, has—more recently—experienced dramatic growth in market size. And while the sector is approaching nearly $4 trillion, the securitized assets market and investor appetite continues to expand. In this episode of All the Credit®, we'll explore the evolution of the fixed income securitized marketplace and make our case as to why we believe securitized products offer a compelling source of value. Host and PGIM Fixed Income Senior Portfolio Manager, Mike Collins, sits down with Gabriel Rivera and Edwin Wilches, Co-Heads of Securitized Products at PGIM Fixed Income, to discuss the ins and outs of this complex asset class, what opportunities we like (and those we don't), and our current positioning. Our panel closes their discussion with a look at the ESG footprint in the securitized products market, and the investor implications for the LIBOR to SOFR transition.

Recorded on February 4, 2022.

This episode was recorded on January 11, 2022.

The 26th annual UN Climate Change Conference (COP26) fell short of our expectations and left ESG-focused investors with more considerations than ever before. It also did little to add clarity to the path ahead. With COP26 behind us, host Michael Collins, CFA is joined by PGIM Fixed Income's ESG specialists, Armelle de Vienne and John Ploeg, CFA for an insightful discussion of the summit, how it came to be, its purpose, and its major takeaways. Our ESG specialists also provide their take on how the asset management industry and ESG-focused client expectations will evolve in response to the pervasive demand for ESG-considerations to be incorporated in investment decisions. The discussion details how climate and social governance considerations are factored into PGIM Fixed Income's proprietary impact ratings, what we're doing to help ESG-focused clients meet their investment goals, including in the CLO-space, and how our active investment approach helps PGIM Fixed Income maintain a competitive advantage in the ESG-space.

Looking for more content from PGIM Fixed Income's ESG specialists? Check out The Bond Blog @ PGIM Fixed Income for John Ploeg's recent post, Three Flawed Assumptions in Climate Risk Models: https://pgimfixedincome.blog/three-flawed-assumptions-in-climate-risk-models/?utm_medium=3rdParty&utm_content=2021-02-09

This episode was recorded on December 1, 2021.

In this episode of All The Credit, PGIM Fixed Income's panel discusses the latest emerging trends in the global banking sector, which include the rapidly growing interest in central bank digital currencies. Host and Senior Portfolio Manager Michael Collins, CFA is joined by Chief European Economist Katharine Neiss, PhD, and European Investment Grade Credit Research Analyst James Hyde for a conversation on disruptions in the sector, what's driving the ongoing resilience in global banks, and how our team views investment risks and opportunities. Katharine Neiss also recently authored an entry on "The Bond Blog @ PGIM Fixed Income" on the ECB's push for a digital currency, which you can find here: https://pgimfixedincome.blog/behind-the-ecbs-digital-currency-push/. This episode was recorded on November 4, 2021.

Episode 20 of All The Credit® covers the current topics impacting emerging markets– idiosyncratic issues, the unique inflationary challenges facing EM nations, how developed markets impact the sector, China, and more. Cathy Hepworth, CFA, Head of Emerging Markets Debt, joins Host and Senior Portfolio Manager Michael Collins, CFA, to provide her insights on what her team is watching across the range of emerging market strategies managed at PGIM Fixed Income. (Recorded on September 29, 2021)

With approximately 100 years of investment experience across the three-member panel, this episode of All The Credit delves into the nuances of the current global credit cycle with a special focus on how the "rising star" phenomenon is impacting investment grade and high yield markets. Host and Senior Portfolio Manager Mike Collins welcomes PGIM Fixed Income's Terence Wheat, Co-Head of the U.S. Investment Grade Corporate Team, and Steve Logan, European Leveraged Finance Portfolio Manager, for an assessment of how their teams are approaching this environment, what's driving the current shift, and potential opportunities for credit investors.

Recorded on August 24, 2021