Global Perspectives

Portfolio managers Seth Meyer and Tom Ross join Adam Hetts, Global Head of Portfolio Construction and Strategy to discuss the prospects for the global economy and why relatively robust fundamentals among high yield borrowers offers grounds for optimism given that markets have already priced in a lot of the inflation concerns.

In this episode of Research in Action, Portfolio Manager Denny Fish makes the case for why investors shouldn’t let tech’s recent pullback overshadow the long-term growth potential of powerful mega themes, including the cloud, Internet of Things, artificial intelligence (AI) and edge computing.

Portfolio managers Guy Barnard and Greg Kuhl join Adam Hetts, Global Head of Portfolio Construction and Strategy to discuss REITs’ performance to-date and the impact of stagflation concerns, rising rates, and higher energy and other input costs on the sector.

In this episode of Research in Action, Research Analyst Noah Barrett explains what’s behind the recent rally in energy stocks and why he thinks supply/demand dynamics for crude in the post-pandemic economy will likely be supportive of the sector.

Portfolio Managers Nick Childs and Jessica Shill discuss why collateralized loan obligations (CLOs) deserve a closer look in today’s environment given their low interest rate sensitivity, attractive yields and diversification benefits.

Key Takeaways:

• The current mix of low yields, high inflation and rising interest rates should prompt investors to be more thoughtful about how – not if – they should take bond exposure.
• Floating-rate securities such as CLOs can help diversify a portfolio of government and corporate bonds while offering competitive yields and lower sensitivity to rising rates.
• Although the CLO market has become accessible to a wider range of investors in recent years, we believe a rigorous due diligence process remains a critical component of investing in the asset class.

Jenna Barnard and John Pattullo, Co-Heads of Strategic Fixed Income, join Adam Hetts, Global Head of Portfolio Construction and Strategy, in the latest episode of Global Perspectives, discussing all matters bond yields, central bank policies and the economy.

FinTech is undergoing rapid change and as it does, the intensity of disruption is growing. In this episode of Research in Action, Ian McDonald, a research analyst who covers the industry, joins Director of Research Matt Peron in a discussion about FinTech’s evolution and what it could mean for the future of financial services.

Key Takeaways:

• FinTech as an industry is evolving quickly, with dramatic consequences for the distribution of financial services.
• Initially, this change was marked by the shift from analog to digital (e.g., the bank branch becomes an app). But now, disruption has become more systemic, with new non-bank players threatening to displace incumbents.
• In this dynamic environment, investors should consider a new framework for valuing financial services companies – one in which payments and software merge – and be prepared for even more disruption and potential growth opportunities in the coming years.

Adam Hetts, Global Head of Portfolio Construction and Strategy, speaks with Portfolio Manager Nick Schommer about how an independent mindset has shaped his investment approach through a volatile ‒ and unique ‒ COVID environment.

Key Takeaways:

• Each economic crisis presents different challenges, and the COVID investment environment ‒ marked by aggressive stimulus and consumer strength ‒ has certainly been unique.
• A favorable monetary and fiscal backdrop, along with ongoing bouts of volatility, have created value in some unexpected areas of the market thus far.
• As we enter the next phase of recovery, we believe opportunity may be found in identifying companies with pricing power that can grow earnings and cash flow in an environment where we are likely to see structurally higher inflation.

Inflation, rising interest rates and coronavirus variants could create volatility in financial markets heading into 2022. But in this episode of Research in Action, Director of Research Matt Peron explains why economic growth could still continue in the new year and what that means for equity investors.

Key Takeaways

• As the global economy continues its post-pandemic recovery, above-average inflation, changes to monetary policy and a number of other variables could combine to create volatility for equity markets in the first half of 2022.
• But we think this volatility will reflect a transition to the mid-part of the economic cycle rather than the end, with more sectors potentially participating in market gains.
• In addition, the shift from growth-at-any-price to growth-at-a-reasonable-price could finally gain traction in markets, benefiting a broader set of stocks.