According to Fabrice Cuchet, CIO of Alternative Investments and a Candriam Executive Committee Member, "Volatility is back with us for a long time to come. After several years in a world in which volatility had been ‘anesthetised’ by central bank actions, we are witnessing a reversion to the mean with the very gradual phase-out of US QE. But we are also subject to recent actions of regulators, whose regulatory tsunami in recent years has drastically reduced the number of market participants. There are now far fewer liquidity providers such as bank proprietary trading desks and last-resort buyers such as insurance companies. The concentration of market participants is a structural factor in increased volatility."
The financial crises of the past eight years created significant shifts in the financial markets. Long gone are the days of low-risk sovereign bonds. New regulations, on-going volatility and continued deleveraging trends have forced borrowers and institutional investors alike to reconsider their options.
This paper addresses how investors can best navigate the new fixed income era by focusing on High Yield corporate credit. It also details which strategies and tools are best adapted to benefit from credit opportunities and manage risk.
Convertible bonds have formed an important part of many investors’ armoury for many years now, as they provide a number of important benefits. But with benchmarked long-only convertibles funds all chasing a limited universe of bonds, is now the time to take a new approach to the asset class?
In this paper we explain why it is important not to stick too closely to a benchmark, and how it is possible to take advantage of the wide variety of opportunities currently available in the convertibles markets – not just through taking long-only positions.
This White Paper explains correlation, dispersion and link bewteen both