Perspective - Video Webcast

60 seconds on global credits: goldilocks economy

In this short video Manu George, Senior Investment Director, Fixed Income, shares his view on this goldilocks economy.

29/07/2019

Manu George

Senior Investment Director, Fixed Income

The global economy today is not growing as fast as it was in 2016 and 2017. What we see today is a global economy that has been held back as a result of protracted trade tensions between the US and its trading partners, with a slowing down of consumer confidence, as well as industrial activity that is going down a little bit as well.

On top of all of this, inflation, which was expected to grow in 2019 and 2020, hasn’t actually grown. It has actually stayed low much longer than both the central banks around the world and market participants have anticipated. As a result, for us, such an environment where the economies aren’t growing too quickly, and where inflation is being kept in check, is what we refer to as a “Goldilocks” environment. Something not too hot, neither is it too cold.

Within that context, for us, this means that bonds are the instrument that is likely to benefit the most from a medium to slower paced growing global economy. And especially for investors who invest in bonds, corporate bonds offer the best opportunity set, especially if you have the flexibility to access the global corporate bond opportunity set.

 

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