Viewpoints

Against a shifting macro, political and geopolitical backdrop, our fixed income portfolio managers explore the future prospects for high yield, emerging markets debt, and investment grade credit.

The first major real estate downturn since the GFC is almost over. Demand is rebounding modestly across most of the U.S. real estate market while supply continues to pull back. This backdrop is presenting select opportunities in the asset class—but near-term risks remain.

A cooling economic backdrop in Europe and prospects for further monetary policy easing favor core property—given its bond-like investment attributes—over secondary assets.

With major central banks having started their rate-cutting cycles, and domestic tailwinds supporting individual regions, there is a compelling case for Asian equities.

Targeted policy support in China and the start of the Fed’s rate-cutting cycle are supportive for the outlook on Hong Kong-China equities—but domestic and global uncertainties remain.

With the favorable fundamental and technical backdrop firmly in place, and attractive income opportunities remaining in both bonds and loans, the case for high yield continues to be compelling.

We started senior lending in the Asia Pacific private credit market in 2011—and together with our 30+ years of managing private credit globally, our global scale, and a disciplined approach, we have become one of the most active lenders in APAC today.

The maturity wall facing high yield bond issuers has garnered much attention. But given the market’s short duration profile, lower prices and higher-quality relative to history, the reality facing issuers is less daunting.

The popularity of perpetual BDCs and speed of capital raise for some has made it harder for certain managers to selectively deploy capital into true middle market deals—leading to “style drift” that can expose investors to unwanted risks.