The Take
on what the market gives us…
Can We Be Optimistic About Climate Change?
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April 21, 2022
I tend to think of myself as a “glass half full” type of person. But, if I’m being honest, much of the reading I do on a daily basis gets pretty depressing. It would be easy to feel down about the impacts of climate change, the lack of urgency to enact change on a global level, and the severe imbalance of those most affected. The most recent Intergovernmental Panel on Climate Change (IPCC) Assessment Reports don’t offer much room for hope either. But can we be optimistic about climate change? Read More
Three Myths of Rising Rates
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April 13, 2022
It feels like one of those years – it's only April, and we’ve already been through a full cycle of volatility. And the outlook doesn’t get better. It's hard to say where markets may be in a month, never mind six months. This type of environment can fuel hearsay, innuendos, and old myths in fixed income. But myths are filled with embellishments and separating fact from fiction is critical in fast-moving markets. Read More
The Silver Linings Playbook
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April 6, 2022
In this world, nothing can be said to be certain, except death and taxes… and the probable outperformance of municipal bonds in a rising rate environment. Read More
The Fixed Income Investor’s Guide to Building Your Bracket
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March 23, 2022
The NCAA March Madness tournament has begun. Sixty-eight colleges are playing for the national title over the next month in a single-elimination basketball tournament. As with college basketball, we think having an efficient defense resonates with our clients and how we strive to manage bond portfolios. An efficient defense allows us to transition quickly and efficiently to offense when the market environment shifts. Read More
Bonding for 35 Years
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March 16, 2022
Today is IR+M’s 35th. Seems like yesterday when the two of us were in suits and ties in shared office space, talking on phones while figuring out yields on a Monroe bond calculator, and trying to picture our portfolio positioning by taping together Lotus 123 worksheets from a daisy wheel printer…… Read More
Lights, Camera, Action: Non-Traditional Asset-Backed Securities (ABS) in the Spotlight
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March 9, 2022
As investors have increased allocations to “non-traditional” sectors in search of yield, scrutiny has started to mount regarding the ratings of the bonds. Of the $90+ billion of non-traditional ABS issued in 2021, the vast majority had only one public rating from a 'Big 3' ratings firm or lacked a 'Big 3' rating altogether. This contrasts sharply to the investment-grade corporate bond market, where at least two public ratings from a ‘Big 3’ agency are standard. Read More
Consistently Inconsistent: Credit Ratings versus ESG Ratings
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February 16, 2022
Credit ratings for bond issues have been a mainstay of fixed income analysis for well over 100 years. Unlike traditional credit ratings, ESG ratings are in their early stages on a relative basis. Ultimately, improved data disclosure, more standardized information, and consistent standards-based application on SASB and other regulatory bodies will go a long way toward developing more reliable ESG ratings. Read More
Fed Up
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February 10, 2022
Recently, the FOMC has shifted its focus from closing the employment gap to mitigating inflation trends. They’ve announced their conventional tightening toolkit and ramped up hawkish rhetoric. Yet waning fiscal spending, rising tax revenues, and shortening auctioned Treasury maturities has countered their efforts to tighten financial conditions back to “normal”. Read More
Disruption: Innovation Breeds Risk and Opportunity
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December 17, 2021
Disruption is seemingly inevitable – and the pace of innovative disruption is only accelerating. In this week’s edition of The Take, we discuss how disruption factors into how we think about credit risk and portfolio management. Read More
Changing RBC Bond Factors for U.S. Life Insurance Companies - What Does it all Mean?
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December 8, 2021
In this week’s edition of The Take, Sr. Client Portfolio Manager Rob Lund discusses the changing RBC bond factors for US Life Insurance Companies and what it all means for the broader market. Read More