Scott Minerd, Chairman of Investments and Global CIO, analyzes global macroeconomic trends most likely to shape the investment environment in 10 charts.
2017 T. Rowe Price Global Economic OutlookT. Rowe Price
Our Chief U.S. Economist, Alan Levenson, discusses his perspective on the current global economic environment and what investors could expect to see in 2017.
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
Frothy global assets are flashing warning signs despite the lack of an obvious catalyst to sell
Political action to redress rising inequality may provide the trigger
Avoiding major market corrections can have a huge impact on long term portfolio returns
The outlook for oil remains murky but expectations for a significant rally have receded
Macro-economic indicators suggest a subdued outlook for the GCC
Profits for listed regional companies are stable but the ‘subsidy arbitrage’ is over
Scott Minerd, Chairman of Investments and Global CIO, analyzes global macroeconomic trends most likely to shape the investment environment in 10 charts.
2017 T. Rowe Price Global Economic OutlookT. Rowe Price
Our Chief U.S. Economist, Alan Levenson, discusses his perspective on the current global economic environment and what investors could expect to see in 2017.
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
Frothy global assets are flashing warning signs despite the lack of an obvious catalyst to sell
Political action to redress rising inequality may provide the trigger
Avoiding major market corrections can have a huge impact on long term portfolio returns
The outlook for oil remains murky but expectations for a significant rally have receded
Macro-economic indicators suggest a subdued outlook for the GCC
Profits for listed regional companies are stable but the ‘subsidy arbitrage’ is over
As Fed tapering unfolds, we expect to see stronger growth from developed markets, while emerging markets in aggregate may experience further currency and capital market weakness. In the United States, declining labor participation continues to drive falling unemployment figures, and may harbor the beginning of a wage inflation surprise.
• We expect credit, liquidity, and prepayment risks will continue to
be rewarded by the market in the months ahead, while interestrate
risk remains unattractive due to its asymmetric risk profile.
The global economy is improving overall, with the U.S. and U.K. leading the way. We expect higher GDP growth from the U.S. to support risk assets in the third quarter. We continue to expect a rise in U.S. interest rates in 2014, though eurozone policy may help slow a near-term increase. We favor credit, prepayment, and liquidity risks, which we express in allocations to mezzanine CMBS, peripheral European sovereigns, select EM sovereigns, and interest-only (IO) CMOs.
Signs of inflation will raise the stakes for the Fed’s policy communications. Favorable conditions for leveraged strategies could reverse quickly. Reasonable valuations and the Fed’s policy goals continue to support risk assets.
No bubble trouble; stocks are still reasonably priced. This credit cycle has unique characteristics that continue to make high-yield bonds attractive. Interest-rate volatility poses greater risk than higher rates themselves.
U.S. equities continued their impressive advance, with
no significant declines during the quarter. In Europe, policy changes may function as an important tailwind for growth and market performance. Globally, M&A activity has been on the rise, giving a boost to equity prices across the market-cap spectrum. The current bull market has been significant — in terms of both length and magnitude.
• Spread sectors continued to rally as investors focused more on opportunities than on risks.
• The Fed maintained its stance, but new questions emerged about how much further influence the central bank can exert.
• With tax rates fixed for the near term, policymakers turned their attention to spending cuts.
• Despite tighter valuations in corporate credit, we foresee continued solid demand and fundamentals.
As Fed tapering unfolds, we expect to see stronger growth from developed markets, while emerging markets in aggregate may experience further currency and capital market weakness. In the United States, declining labor participation continues to drive falling unemployment figures, and may harbor the beginning of a wage inflation surprise.
• We expect credit, liquidity, and prepayment risks will continue to
be rewarded by the market in the months ahead, while interestrate
risk remains unattractive due to its asymmetric risk profile.
The global economy is improving overall, with the U.S. and U.K. leading the way. We expect higher GDP growth from the U.S. to support risk assets in the third quarter. We continue to expect a rise in U.S. interest rates in 2014, though eurozone policy may help slow a near-term increase. We favor credit, prepayment, and liquidity risks, which we express in allocations to mezzanine CMBS, peripheral European sovereigns, select EM sovereigns, and interest-only (IO) CMOs.
Signs of inflation will raise the stakes for the Fed’s policy communications. Favorable conditions for leveraged strategies could reverse quickly. Reasonable valuations and the Fed’s policy goals continue to support risk assets.
No bubble trouble; stocks are still reasonably priced. This credit cycle has unique characteristics that continue to make high-yield bonds attractive. Interest-rate volatility poses greater risk than higher rates themselves.
U.S. equities continued their impressive advance, with
no significant declines during the quarter. In Europe, policy changes may function as an important tailwind for growth and market performance. Globally, M&A activity has been on the rise, giving a boost to equity prices across the market-cap spectrum. The current bull market has been significant — in terms of both length and magnitude.
• Spread sectors continued to rally as investors focused more on opportunities than on risks.
• The Fed maintained its stance, but new questions emerged about how much further influence the central bank can exert.
• With tax rates fixed for the near term, policymakers turned their attention to spending cuts.
• Despite tighter valuations in corporate credit, we foresee continued solid demand and fundamentals.
Pacific Asset Management is sub-advisor to the AdvisorShares Pacific Asset Enhanced Floating Rate ETF (FLRT)*
2014 has seen the consensus of higher Treasury yields and economic activity fail to materialize. Lower rates and risk premiums have led to strong returns year-to-date. In this commentary, Portfolio Managers David Weismiller, Michael Marzouk, and Bob Boyd discuss the current market environment, outlook, and portfolio positioning.
*Effective but not available for sale at this time. Go to www.advisorshares.com for more information.
During the second quarter of 2016, acquisitive middle-market issuers capitalized on lenders’ increased risk appetite by entering into attractively priced and structured financings. The dramatic rally in Treasury yields (and other safe haven assets) triggered by the “Brexit” referendum at quarter’s end, augurs well for further improvement in domestic credit market conditions.
The overriding factor influencing fixed-income performance was the market’s changing expectations as to when the Federal Reserve would begin tapering its quantitative easing program. The fund’s mortgage prepayment strategies, most notably our holdings of collateralized mortgage obligations, detracted from performance before rebounding in June. Our interest-rate and yield-curve positioning aided performance during the quarter. Our near-term outlook calls for continued positive economic growth and a potentially range-bound interest-rate environment.
Global bond markets fell in May and June, as investors contemplated the end of massive liquidity from the U.S. Federal Reserve’s bond-buying program. The fund’s overweight exposure to the strengthening U.S. dollar aided performance during the quarter, as did our holdings of commercial mortgage-backed securities. Our mortgage credit holdings and our allocation to high-yield bonds generated positive returns early in the period before investors began to shed risk in May, but the positions remained positive overall for the quarter. We have a generally positive outlook for global economic growth and are seeking to capitalize on opportunities in spread sectors exhibiting improved relative value.
Capital Markets Industry Insights - Fall 2016Duff & Phelps
Middle-market issuers were greeted by strong demand this quarter from mainstream credit sources as well as those seeking higher degrees of risk and return. Macroeconomic fundamentals continued to improve, though the focus remained on monetary policy. With an increasingly stark dichotomy of views at the Federal Reserve, volatility persisted in anticipation of clearer guidance on the pace and timing of rate hikes.
SBI Corporate Bond Fund: An Income Mutual Fund Scheme - Aug 16SBI Mutual Fund
SBI Corporate Bond Fund with moderate risk invests predominantly in corporate debt securities and aims to generate regular income over medium term. Mutual Fund investors can invest in this mutual fund via SIP or lump sum. Know more about this debt fund on SBI Mutual Fund website page https://www.sbimf.com/Products/DebtSchemes/SBI_Corporate_Bond_Fund.aspx
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
The WhatsPump Pseudonym Problem and the Hilarious Downfall of Artificial Enga...
Q2 2016 Fixed-Income Outlook: Chart Highlights
1. 10 Macroeconomic Forecasts for 2016
Fixed-Income Outlook: Chart Highlights
Managing Through a Persistent State
Of Heightened Volatility
Second Quarter 2016
Guggenheim Investments
2. Table of Contents
2Guggenheim Partners
Bank Loans, CLOs, and Non-Agency RMBS Have Offered a Yield Advantage with Limited Duration Risk 3
A Stabilized Oil Market Underpins Our Positive Credit Outlook 4
High-Yield Bonds Rebounded After a Terrible Start to 2016 5
Bank Loans: Lower Quality Outperformed Following Mid-Q1 Rebound 6
Mezzanine CLO Spreads Tightened Despite Rising Loan Defaults 7
Improving Borrower Credit Underscores Our Constructive View on the Non-Agency RMBS Market 8
Shrinking Dealer Balance Sheets Provide Technical Support to the CMBS Market 9
Strong Retail Demand for Municipal Bonds Pulls Yields Lower 10
The Fed Has Stepped in as Holder of Agency MBS as Fannie Mae, Freddie Mac Step Out 11
10-Year Treasury Yields Tower Over 10-Year Global Sovereign Bonds 12
Guggenheim’s Investment Process 13
The Guggenheim Investments (“Guggenheim”) quarterly Fixed-Income Outlook presents the relative-value
conclusions of our 160+ member fixed-income investment team and illuminates the uniqueness of our investment
process. This chart book presents selected highlights from the Second Quarter 2016 Fixed-Income Outlook.
This material is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. This material should not be considered research nor is the
material intended to provide a sufficient basis on which to make an investment decision. This material contains opinions of the authors but not necessarily those of Guggenheim Partners or its subsidiaries. The authors’ opinions are subject to change
without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to
be reliable, but are not assured as to accuracy.
3. Bank Loans, CLOs, and Non-Agency RMBS Have Offered a Yield
Advantage with Limited Duration Risk*
Source: Credit Suisse, Barclays, Citi, Guggenheim Investments. Data as of 3.31.2016. *Although these asset classes have shown lower duration risk (due to their adjustable rates), they are subject to additional risks. Please see the end of the
presentation for risk disclosure. Duration risk is a measure of an asset's price sensitivity to changes in interest rates. Representative Indexes: Bank loans: Credit Suisse Leveraged Loan Index; High Yield Corporate Bonds: Credit Suisse High-Yield
Corporate Bond Index; AA Corporate Bonds: Barclays Investment-Grade Corporate Bond index, AA subset; Agency MBS: Barclays U.S. Aggregate Index (Agency Bond subset); CLO AA and CLO 2.0 BB data provided by Citi Research, CMBS 2.0
AA: Barclays CMBS 2.0 Index (AA subset), Treasurys: Barclays U.S. Aggregate Index (Treasurys subset), Non-Agency RMBS: Based on BAML and Guggenheim Trading Desk Indicative Levels
§ About 90 percent of the
Barclays U.S. Aggregate
Index (the Agg) is in low-
yielding Treasurys,
Agencies and investment-
grade corporates; more
compelling opportunities
can be found in sectors
that are under-represented
in the benchmark.
§ Structured credit,
particularly collateralized
loan obligations and bank
loans, have offered higher
yields and less rate risk
than similarly rated
corporates.
§ Our positive outlook for
the U.S. economy, a
cautious Federal Reserve
(Fed) and stabilizing oil
prices support our
constructive view of these
asset classes.
3Guggenheim Partners
The Core Conundrum: About 90
percent of the Barclays Agg is
comprised of low-yielding
Treasurys, Agencies, and
investment-grade corporate bonds.
Compelling
opportunities can
be found in
sectors that are
under-represented
in the Barclays
Agg.
4. A Stabilized Oil Market Underpins Our Positive Credit Outlook
Source: Guggenheim Investments, Bloomberg, Haver, EIA. Data as of 3.31.2016.
§ Near-term price volatility
is likely, and another
negative shock is possible,
but oil prices are
beginning to stabilize as
supply/demand comes
into balance.
§ Our model indicates that
oil prices will average
$40–45 per barrel for the
remainder of 2016.
§ Declining oil prices had
weighed heavily on
corporate credit, but our
current outlook supports a
generally positive credit
performance for
investment-grade and
high-yield issuers in the
energy sector.
4Guggenheim Partners
After two years
of steady
declines, oil has
stabilized. Our
model calls for
oil to average
$40-45 for the
rest of 2016.
5. High-Yield Bonds Rebounded After a Terrible Start to 2016
Source: Credit Suisse, Guggenheim Investments. Data as of 4.18.2016.
§ Risk aversion at the start
of 2016 led to a 5 percent
loss in the high-yield bond
market in the first few
weeks of the year.
§ High-yield bonds were
headed for their worst start
on record, but rising oil
prices, weaker dollar, and
dovish commentary by the
Fed drove a sentiment
turnaround in the quarter.
§ These trends continued
into the second quarter. A
stabilizing oil market
should help energy bonds
to perform well over the
next 12–24 months.
§ Positive net fund flows and
weak new issue activity
should also support prices.
5Guggenheim Partners
High-yield spreads peaked at 914 bps on
Feb. 11, 2016; oil prices began to rebound
after dovish Yellen Senate testimony;
spreads finished the quarter at 753 bps
6. Bank Loans: Lower Quality Outperformed Following Mid-Q1 Rebound
Source: Credit Suisse, Guggenheim Investments. Data as of 3.31.2016.
§ Significant risk-aversion in
the first part of the first
quarter was followed by a
dramatic shift that saw the
sharpest rebound in the
weakest credits.
§ CCC-loans and distressed
loans (those rated CC and
below or in default)
recorded their best
monthly gain in March
since January 2012 and
January 2014,
respectively, after 10
months of
underperformance relative
to higher-rated corporates.
§ With strong earnings
growth this cycle and a
decent if unspectacular
economic backdrop, we
maintain a constructive
view on the loan market.
6Guggenheim Partners
Best monthly
performance since
January 2014.
7. Mezzanine CLO Spreads Tightened Despite Rising Loan Defaults
Source: JP Morgan, S&P LCD, Guggenheim Investments. Data as of 3.31.2016.
§ Q1 spread widening and
compression across
mezzanine collateralized
loan obligation (CLO)
tranches occurred without
changes in underlying
credit fundamentals.
§ While loan default rates
remain below average, the
slowly rising volume of
defaults highlights
deteriorating credit
conditions.
§ Spreads on post-crisis
CLOs ended at the middle
of their 52-week ranges;
pre-crisis CLOs remain at
the widest end of their
ranges.
§ As mezzanine CLO
spreads tighten, we see
potential for relatively
attractive risk-adjusted
returns in senior CLO
tranches.
7Guggenheim Partners
8. Improving Borrower Credit Underscores Our Constructive View on the
Non-Agency RMBS Market
Source: Amherst-Pierpont Securities, JP Morgan, Guggenheim Investments. Data as of 3.31.2016.
§ The 30 percent recovery in
national home prices since
2012 has boosted the
share of non-Agency
RMBS loans with positive
home equity to 86 percent,
compared to a dismal 30
percent in the housing
crisis.
§ Non-Agency RMBS
collateral is shifting toward
re-performing borrowers—
previously delinquent
borrowers who have
improved personal
finances.
§ Credit curing, improved
economic conditions, and
home price appreciation
have helped increase the
proportion of re-performing
mortgage borrowers in the
non-Agency RMBS
market, underscoring our
constructive view on the
mortgage sector.
8Guggenheim Partners
Default and prepayment
characteristics are
improving for this
growing segment of
the non-Agency MBS
market.
9. Shrinking Dealer Holdings of CMBS Provide Technical Market Support
Source: Federal Reserve Bank of New York, Guggenheim Investments. Data as of 3.31.2016, calculated as a four-week moving average.
§ The CMBS market rallied
dramatically in March and
early April, following a
swoon in Jan. and Feb.
§ Heightened market
volatility, however, is not
conducive to a properly
functioning market, and as
volatility persisted,
mortgage origination and
new issue CMBS supply
almost ground to a halt.
§ Primary dealer net
positions of private label
CMBS dropped to $6.5
billion, the lowest level
since the New York Fed
began tracking these data
in 2013.
§ Low dealer inventories,
combined with declining
new issuance, should
provide technical support
to the market.
9Guggenheim Partners
At $6.5b, dealer
balances of private
label CMBS are at the
lowest level in the
history of this data set.
10. Strong Retail Demand for Municipal Bonds Pulls Yields Lower
Source: Lipper, Barclays, Guggenheim Investments. Data as of 3.31.2016.
§ Investor demand for
municipal bonds remains
strong despite high-profile
problem situations in
Puerto Rico, Atlantic City,
and the Chicago Public
School system.
§ Flows into municipal bond
funds have been strong,
with $9.3 billion coming to
market in the first quarter
of 2016.
§ Demand from individual
investors has a meaningful
impact on the municipal
bond market given that
individuals and mutual
funds hold 70 percent of
the total market
outstanding.
§ Tighter spreads warrant a
look at higher-yielding
revenue bonds vs. general
obligation bonds.
10Guggenheim Partners
11. The Fed Has Stepped in as Holder of Agency MBS as Fannie Mae,
Freddie Mac Step Out
Source: BofA Merrill Lynch Global Research. Data as of 9.30.2015.
§ One of the consequences of
the financial crisis has been a
stark shift in the sources of
demand for Agency MBS.
§ Fannie Mae and Freddie Mac
(together, the government-
sponsored enterprises, or
GSEs) were placed into
conservancy, which required
them to shrink, and ultimately
eliminate, their retained
portfolios.
§ The reduction in their market
demand has been more than
offset by the Fed’s own
balance sheet expansion,
which continues to offer
strong support to the market.
§ This support, combined with
the demand from foreign
investors seeking higher
sovereign yields, should
contain any significant
spread widening.
11Guggenheim Partners
The Federal Reserve has
become by far the biggest
holder of Agency MBS.
12. 10-Year Treasury Yields Tower Over 10-Year Global Sovereign Bonds
Source: Guggenheim Investments, Bloomberg. Data as of 3.31.16.
§ The U.S. Treasury yield
curve is materially higher
than the curves of other
developed countries,
reflecting differences in
monetary policy, growth,
and inflation expectations.
§ The U.S. 10-year Treasury
yields 1.77 percent,
compared to -0.03 percent
for Japan, 0.15 percent for
Germany, and 0.49
percent for France.
§ Even if the Federal
Reserve were to resume
its tightening campaign,
U.S. fixed income will
remain relatively attractive
given the extremely low
levels of global bond
yields.
12Guggenheim Partners
Even at this low level,
U.S. yields exceed those
of foreign sovereign debt.
13. Guggenheim’s Investment Process
§ Our quarterly Fixed-Income Outlook shares insights from the
leaders of our 160+ member fixed-income investment team and
illuminates the uniqueness of our investment management
structure and process.
§ The Guggenheim process features separate groups that
specialize in the different functions of investment management:
Our Macroeconomic Research Team identifies and provides
outlooks on key economic themes; our Sector Teams conduct
fundamental analysis to make security recommendations; our
Portfolio Construction Group determines investment strategy,
portfolio positioning, and sector weightings based on
macroeconomic and relative-value sector analysis; and our
Portfolio Managers implement and optimize investment
strategies, and ensure that portfolios comply with client
guidelines. The groups work autonomously, but collaborate
within our investment process.
§ Intended to avoid cognitive biases, snap judgments, and other
decision-making pitfalls, this structure also provides a foundation
for disciplined, systematic, and repeatable investment results
that does not rely on one key person or group.
§ The people and process are the same for institutional accounts
and mutual funds. Our pursuit of compelling risk-adjusted return
opportunities typically results in asset allocations that differ
significantly from broadly followed benchmarks.
13Guggenheim Partners
15. 15Guggenheim Partners
About Guggenheim Investments
Guggenheim Investments is the global asset management and investment advisory division of Guggenheim
Partners, with $199 billion1 in total assets across fixed income, equity, and alternative strategies. We focus on
the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds,
endowments and foundations, consultants, wealth managers, and high-net-worth investors. Our 275+
investment professionals perform rigorous research to understand market trends and identify undervalued
opportunities in areas that are often complex and underfollowed. This approach to investment management has
enabled us to deliver innovative strategies providing diversification opportunities and attractive long-term results.
About Guggenheim Partners
Guggenheim Partners is a global investment and advisory firm with more than $240 billion2 in assets under
management. Across our three primary businesses of investment management, investment banking, and
insurance services, we have a track record of delivering results through innovative solutions. With 2,500
professionals based in more than 25 offices around the world, our commitment is to advance the strategic
interests of our clients and to deliver long-term results with excellence and integrity. We invite you to learn
more about our expertise and values by visiting GuggenheimPartners.com and following us on Twitter at
twitter.com/guggenheimptnrs.
Contact us
New York
330 Madison Avenue
New York, NY 10017
212 739 0700
Chicago
227 W Monroe Street
Chicago, IL 60606
312 827 0100
Santa Monica
100 Wilshire Boulevard
Santa Monica, CA 90401
310 576 1270
London
5th Floor, The Peak
5 Wilton Road
London, sw1V 1LG
+44 20 3059 6600