As 2018 ended with some rather unsettling volatility, we juxtapose the zodiac symbols from one of credits’ main players, China, and look at what fixed income investors might expect, and might be surprised by, in 2019’s Year of the Pig.
After the disappointment of 2018, Chief Executive Peter Harrison rounds up the factors our fund managers think could lead to a brighter year ahead.
We expect that the US dollar’s strength should fade in 2019 as the pace of US rate hikes begins to slow, which will ease the pressure on Asian bonds next year.
We are taking a defensive stance, staying underweight to the technology sector, while emphasising domestically-focused areas of the market and those with long-term growth trends.
The securitized sector offers a respite from overcrowded corporate credit markets and inefficiencies continue to create opportunities.
Emerging markets debt yields are at levels which rival reasonable forward expectations for equities in 2019. In our view, a true catalyst for additional price gains will likely be a lower US dollar.
We believe that US earnings growth will slow in 2019, but we think the more challenging corporate environment may provide a rich backdrop for stockpickers.