M&G Investments

Energy transition: Beyond renewables

Just a few months ago, you had to take great care with bonds in a context of inflation. But now investors should be opting for this asset class, says Stefan Isaacs, Deputy CIO Public Fixed Income at M&G.

Just over a year has passed since the gilt market turmoil of September 2022, sparked by the UK government’s so-called ‘mini-budget’. The fallout from the crisis, as the pound fell and gilt yields spiked, prompted an emergency intervention by the Bank of England to restore orderly market conditions against a global backdrop of high inflation and rising interest rates. A significant change in asset class demand dynamics ensued as pension funds sought to meet collateral calls for their LDI mandates.

As abhorrent as recent events in the Middle East have been, financial markets have, for now, taken these events in their stride, with some flight to safety in public markets, but fairly mild reactions overall.

Listed infrastructure: distressed valuations, long-term opportunities.

After a sustained era of cheap money, an abrupt and unprecedented shift in the global interest rate hiking cycle was ushered in, as the world’s major central banks sought to stave off surging inflation. The Bank of England moved first, increasing its base rate to 0.25% from a historic low of 0.1% in December 2021. The Federal Reserve (Fed) was next, announcing a rate hike in March 2022, with the European Central Bank (ECB) following suit in July of that year. We take a look at the implications – in the real economy – of the largest global interest rate raising exercise in recent history.

Limiting the worst effects of climate change will require deep, urgent emission reductions. One option for companies aiming to cut emissions and contribute towards the goals of the Paris Agreement is to set a science-based target for emission reductions. In this note, we explain how science-based targets work, and consider the important role they play in M&G’s range of Paris Aligned investment funds

Everyone knows that the best way to kill a Zombie is to smash its brain. For Zombie firms, that killer blow is higher interest rates.

While passive investments have seen rapid growth in recent years, we believe there are several crucial advantages for choosing active management when investing in fixed income. This is especially true in the current climate, as uncertainty over the future path of interest rates and inflation continues to drive heightened volatility across the asset class. 

We all know Asia is the largest continent on earth, both in terms of land area and population. However, economically, the region stands out too, with some of the world’s fastest-growing economies, including China, India and Indonesia. According to the International Monetary Fund, Asia is estimated to contribute around 70% of global growth this year.

2022 was a turbulent year for investors and fund managers across the board and, as an asset class, fixed income sold off sharply too. 

We believe Japanese equities represent a compelling long-term investment opportunity. In our view, they offer the potential for attractive returns over the coming years. While there are some short-term tactical considerations that might keep some investors on the side-lines, these should be considered in the context of the overall opportunity set for the asset class.

Here are five numbers which demonstrate innovation can overcome the flaws of an old-world linear economic model

Our investment strategy aims to boost investors’ returns to derive greater value from their capital and to protect them from inflation

 When you cannot predict, prepare

Short-dated corporate bonds solution could be an attractive option for those investors concerned about interest rate rises and volatility in 2023-24

Not only are infrastructure assets critical for everyday activities, we believe they are also going to be an essential part of tomorrow’s world