Vol-Agility: Agile investing in volatile times
Equity income was once a popular and well-established investment strategy, offering investors a chance to capture the power of compounded dividend appreciation over the long-term. In recent years, however, it has been somewhat overshadowed by the outperformance of growth stocks largely led by US technology stocks. Capital gains took a precedence during the post-Global Financial Crisis era of ultra-low interest rates and quantitative easing measures implemented by central banks. Now we find ourselves in a very different environment, we believe the forgotten art of dividend investing could be making a comeback.
Cuteness and investments are two words that are rarely paired together in the same sentence, but one of Japan’s most recognisable cultural and iconic exports stands out in its potential to deliver growth beyond current market imagination. To mark Hello Kitty’s 50th anniversary, Investment Director, Sunny Romo, sat down with Valentina Luo, an Analyst in the Asia Pacific equities team, to discuss the elements of the successful investment story in Sanrio, the creator of the much-loved feline character.
The Great Escape… of UK Unemployment Reporting
Since the onset of the year, Chinese authorities have embarked on strategic measures to stabilize the capital market and bolster economic growth. The People’s Bank of China (PBOC) has taken significant steps, including a 50 basis point cut in the reserve requirement ratio (RRR) – the largest since 2021 — followed by a historic 25 basis point decrease in the 5-year Loan Prime Rate (LPR). These policy actions have significantly boosted market sentiment, as reflected in the recent uplift in the Chinese stock market. These measures also align with our expectation of a supportive policy landscape in China for 2024.
In an era of economic uncertainty and volatility, the importance of managing national debt has never been more evident. Investors seek stability and long-term growth opportunities, so the spotlight turns towards countries with low outstanding debt.
It's not lost on any investor that nearly half the world's population is set to participate in elections this year, with a select few anticipated to significantly alter a country's trajectory. With this in mind, we ask, do corruption perception trends matter to investors?
Our nature and biodiversity insights series covers a range of topics that are central to solving the nature and biodiversity crisis, while highlighting the opportunities for investors to make positive contributions. In this article, Adam Pinfold, Michael Rae and Ben Constable-Maxwell consider the risks of our current unsustainable water use, alongside some of the potential solutions.
2023 was tough for Asian equities. Investor sentiment was kept in check by the Fed’s ongoing interest rate rises and the strength of the US dollar.
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.