Regine Wiedmann

Why short duration high yield? In recent years, record-high new issuance and refinancing activity pushed down coupons and interest expense – and pushed out maturities. Today, this adds up to an even more compelling yield-to-duration trade-off. https://lnkd.in/eMNTPC2f The linked content is intended for qualified institutional investors and/or financial professionals only.

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Closet Benchmarking Among UK Equity Funds? In the ever-evolving landscape of UK equity funds, it’s important to identify which funds are truly active versus those more aligned with the benchmark. Our latest research, visualized in the scatter chart below, sheds light on where funds fall on this spectrum, with the X-axis showing stock active share and the Y-axis displaying a blend of country and industry-level active share, compared to the FTSE All Share index. We observe a wide spread of results, showing the diversity in fund strategies, from highly independent stock-pickers to those with a more benchmark-aligned approach. We highlight 4 funds with the greatest independence from the benchmark: • Lindsell Train UK Equity • Finsbury Growth & Income Trust • Aviva UK Listed Equity • Castlebay UK Equity What do they have in common? Low to zero allocations to sectors like Energy, Health Care, and Materials - proving their differentiated approach from the FTSE All Share index. However, it's crucial to note that while 'closet benchmarking' can suggest a lack of transparency, that might not be the case here. Many of the funds with lower active shares fall into specific categories, such as ‘tilt,’ ‘enhanced index,’ or ‘beta plus’. These approaches are deliberate and part of a well-defined fund strategy to remain aligned to benchmark indices. In terms of performance, the inset chart shows that high active share funds have outperformed their lower active share peers over time. Since April 2012, high active share funds have returned 164% on average, compared to 131.6% for low active share, 126.2% for medium active share, and 134.5% for the benchmark FTSE All Share ETF. What do you think about active investing with benchmark constraints? Is true independence from the benchmark the key to success, or do defined strategies with low active share still have a place in the market? #UKEquity #ActiveManagement #FundResearch #Investing #PortfolioManagement #assetmanagement #stocks

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A 0.25% cut was the plan, but Ms Lagarde is avoiding committing to a monetary policy path. And with the Frankfurt institution revising its 2024 inflation projections on the upside and growth expectation to the downside, we don’t expect clarity soon. In the US, economic growth and consumption remain resilient, but inflation is approaching the Fed’s target and the softening labour market means the door is open for gradual normalisation of policy rates, to reduce the restrictiveness of its monetary policy. Having maintained its Federal Funds Rate in the 5.25%-5.50% target range for more than one year, we expect the Fed to initiate its cutting cycle this week with a 0.25% cut. With just two more meetings this year (November and December), an updated ‘dot plot’ (Fed members’ projections of policy rates) is likely to show it sticking its neck out over the short-term path for interest rates. So, contrary to the Fed, which has paved the way for a full blown loosening cycle, the risk for the ECB is a possible “one and pause” or “one and one” cycle. This divergence is clear in bond markets, with EUR rates underperforming their USD counterparts. Further, a different monetary policy path, also raises questions over the possible appreciation of the euro, which won’t help the competitiveness problems of region. This is also happening as growth is stalling – which is particularly bad timing. The policy rate cutting cycle has begun. Fixed income markets are expecting policy rates in the euro area to go back to 2.0% within the coming year, while long-term core sovereign bond yields currently stand at 2.20%. Such a context pleads for some form of caution on long-term sovereign markets. In contrast, shorter-term sovereign bond markets appear more appealing. Should fears of a more serious economic slowdown resurface, markets would price a more aggressive cutting cycle and hence lower short-term yields. Indeed, as the cutting cycle has started, the short end of yield curve is inverted (reflecting expectations of more cuts down the line), but the curve becomes positively-sloped from the five-year maturity point, as concerns about supply risk and sticky inflation become prevalent beyond that point. Between negative roll yields on the short-end, and term premium uncertainty on the long-end, this cup-shaped curve is wholly unappealing to investors. Credit markets provide an antidote to this treacherous yield curve configuration. Indeed, the credit spread curve is positively-sloped across the maturity spectrum, and therefore enables investors to mitigate the negative slope in governments bonds, making the yield curve for corporate bonds much more attractive. In emerging markets, we believe that the inauguration of a Fed cutting cycle will enable local central banks to cut rates more aggressively than currently priced. Real rates are too high for these economies where disinflation is more advanced than in developed markets.

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Final agenda - Berenberg NextGen #AI Powered Funds Forum, June 27, 2024, hosted at the Berenberg office, Bockenheimer Landstrasse 25, Frankfurt am Main, Germany. As the host and moderator for the upcoming #AI event, I am pleased to have had the experience, together with team Berenberg, to offer a full day agenda, comprised of expert speakers and panel members coming from and making a contribution to the #AI powered asset and wealth management industry, who will share exciting developments and practical applications. Every day we are observing encouraging news from technology firms, emerging, boutique and large established investment managers who are embracing #AI to offer active and passively managed products, services, tools and solutions. These innovative market participants are applying AI to either enhance investment decision making and or offering investment strategies managed by #AI. For investors the AI powered investment management industry is providing unique opportunities, options and alternatives as to how money can be managed. There are a few seats still available for the June 27 AI event. Feel free to contact me directly for additional information [email protected]. Berenberg,Nico Baum,Klaus Naeve,Matthias Born,RAM Active Investments,Emmanuel Hauptmann,Tian GUO, PhD,Google Cloud,Sahil Suri,artellium, Dr. Bernhard Paul Breloer, Christopher Krauss, PhD,Thomas Fischer,ACATIS Investment KVG mbH,Kevin Endler,Eric Endress, PhD,Tungsten Capital Management GmbH,Michael G.,FIRST PRIVATE Investment Management,Richard Zellmann,Christian Schuster,Dr. Sebastian Wenz,Colivar,Mahnoosh Mirghaemi,Dr. Karen Wendt,NNAISENSE,Jonathan Masci,Florian Trifterer

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Fixed Income Forward: September 2024: Aggressive start to Fed rate cuts A highly anticipated rate cut by the Fed has finally arrived. With central banks in Europe making similar moves, the more proactive rate-cutting cycle looks very favourable for bond investors. By Michael Krautzberger, Global CIO Fixed Income and Georgios Georgiou, Global Head Product Specialists Fixed Income at Allianz Global Investors. #FixedIncomeForward #FixedIncome #Bonds #NavigatingRates

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