A soft landing or a hard landing? As we look to 2024, markets are still searching for an answer to this key question. In the minds of many investors either of these two very distinct outcomes has a high probability of occurring. Yet they would lead to diametrically opposite asset allocation decisions, so trying to solve categorically in favour of either could leave one exposed to substantial risks in the event of being wrong.
Each month the team behind our sustainable equity funds answer five topical questions in five minutes – or sometimes a little over! They tackle questions on sustainability issues, introduce new stocks and discuss the impact of market conditions.
In the latest Strategic Thinking video, Colin Finlayson, co-manager of the Aegon Strategic Bond strategies reviews what was a very challenging month for global bond markets, but why he believes the peak of the interest rate cycle and falling inflation make the outlook even more attractive. He also gives an update on how we are allocating against this backdrop and discusses why flexibility will be key.
We were happy to see a new application of our adopted principle: “The greenest building is the one not built”. Not so long ago we read that the approval for demolishing and rebuilding the M&S store on Oxford Street, London had been refused by the secretary of State, Michael Gove. The main argument was that it: “fails to support the transition to a low carbon future and would overall fail to encourage the reuse of existing resources, including the conversion of existing buildings”. Ironically, we also read about a just-completed residential development: Mast Quay Phase II, which is to be demolished as ordered by the local council, although in this case it is the developer that aims to keep the building intact (surely for economic reasons). The tables have turned. Nonetheless, in helping to settle this latest issue, we would like to quote the senior director at Expedition Engineering: “did anyone stop for a second to consider the waste of embodied energy”.
In the latest Strategic Thinking video, Alex Pelteshki, co-manager of the Aegon Strategic Bond strategies, discusses why bonds are back, after years of quantitative and monetary easing causing traditional income asset classes to be squeezed out.
Last week’s announcement by the UK Prime Minister to amend the UK’s net zero strategy, was disappointing from an environmental perspective. Among the changes announced was a delay to the ban on the sale of new internal combustion engine cars and gas boilers until 2035 from 2030. The measures have been widely criticised by climate activists and business leaders alike and must call into question the UK’s position as a global leader on climate change.
Erling Haaland made a blistering start to his football career in England. Two goals against Burnley on the opening weekend of the 2023/24 season took his Premier League record to 38 goals and eight assists in just 36 appearances for Manchester City. He has become a dream Fantasy Football pick, with more than 90% of players selecting him ahead of next weekend’s fixtures.
I recently visited a whisky distillery in the north of Scotland. Clearly, this was for pleasure, not business, as making potent alcoholic beverages isn’t going to feature in a sustainable fund. However, I must confess to enjoying good single malt and while on the distillery tour, I got to thinking about the sustainability challenges the industry faces.
In the latest Strategic Thinking video, Colin Finlayson, co-manager of the Aegon Strategic Bond strategies, discusses three things we learned in the last month - UK Inflation is falling again, Central Banks are now ending (and starting) their hiking cycles, and corporate bonds liked this market backdrop. He also reviews how we are allocating against this backdrop and the three core positions within the portfolio.
Carbon capture and storage has made headlines this summer, with two new UK schemes receiving government backing and more identified over the next decade. Carbon capture is an industry which has had many false starts. Does it really have a part to play in our race to net zero?
Global Fixed Income Mid-Year Outlook
Global House View
In the latest Strategic Thinking video from Aegon Asset Management, Alex Pelteshki, co-manager of the Strategic Bond strategy, reviews the three key investment decisions made in the first half of 2023 and gives his outlook for the remainder of the year.
High yield investors are facing a conundrum as they evaluate valuations and entry points.
Things are not always as they appear. Often a company’s role in creating a sustainable future is not clear at first glance, but a closer look shows its products are a key enabler of the transition.
For years, investors have faced the reality of lending to corporates at ever falling yields. Now, the high yield market is living up to its name. As rates have shifted higher, yields on high yield bonds continue to increase, even in the higher-quality part of the market.
Aegon AM’s Head of Macro Strategy Frank Rybinski (CFA), shares his insights on what he expects the Fed to do next and the monetary outlook for the remainder of 2023. Frank also discusses how he feels investors should position themselves for the environment ahead.
In the latest Strategic Thinking video, Colin Finlayson, co-manager of the Aegon Strategic Bond strategies, reviews global fixed income markets in May, discusses the why the level of yields, peak in inflation and the end of the central banks hiking cycle, make the outlook for bonds so compelling and explains how the fund is allocated against this backdrop.
Markets have become clouded with uncertainty in 2023. Many asset classes lack clear direction, which makes short-term asset allocation decisions challenging. We therefore identify three key themes that global investors should consider in the nearer-term horizon (1-3 months).