Tim Leary joins us on the BlueBay Insights podcast to update on high yield and leveraged finance markets, with a special focus on the subject of liquidity.We asked Tim:How does the global high-yield universe breakdown in terms of the US and European split? Are there any notable differences between the two regions that investors should be aware of?What percentage of the US HY market trades enough to be considered liquid?In terms of active versus passive investing – how significant is the ETF portion of the universe?As an active manager, how do you define liquidity?Did you learn anything from the coronavirus crisis period about best-practice liquidity management or anything that particularly surprised you as a seasoned investor?Could you give us a quick liquidity outlook for the asset class and some positioning highlights as we approach the final quarter of the year?

BlueBay Insights

Liquidity in leveraged finance markets – Tim Leary

Senior ESG analyst, Lucy Byrne, joins us on the BlueBay Insights podcast to share her views on the impact of the COVID crisis on ESG investing.We asked Lucy:Has the appetite for ESG among investors increased during the COVID crisis?How has BlueBay’s ESG business been affected by the crisis?What is the rationale behind BlueBay’s ESG priorities for 2020 and where do you see areas for improvement?

ESG update – Lucy Byrne

David Riley joins us on the BlueBay Insights podcast to update us on the Brexit saga and the latest takeaways form the Fed.We asked David:Brexit has returned onto investors’ radar. What are your thoughts on the latest developments in the Brexit saga?What are your takeaways from the latest Fed meeting?

The return of the Brexit saga – David Riley

David Riley joins us on the BlueBay Insights podcast for his regular update on the latest economic data.We asked David:US Federal Reserve Chairman Jerome Powell’s speech at Jackson Hole is a big point of debate amongst investors. What is your view on the Fed’s new policy framework?What are you expecting from next week’s meeting of the European Central Bank?Equity and credit markets had another positive month in August. Do you expect the rally to continue?

A positive month for credit markets – David Riley

Tim Leary joins us on the BlueBay Insights podcast to update on high yield’s positive summer run, what might be to come in the default cycle and how influential ESG really is to leveraged finance investors.We asked Tim:High yield has had an encouraging summer run – July proved to be a notable month for the US market, which registered its largest monthly gain since October 2011. Has the investment opportunity largely topped out for the year or are you still seeing value?The second-quarter earnings season seemed broadly upbeat for high-yield companies – did any sectoral themes or surprises emerge in line with announcements?Moving onto the topic of defaults, we saw an initial wave in the early days of the pandemic, but things appear to have stabilised now. Could you talk us through your expectations for the shape of the default cycle?With ESG being both part of the BlueBay investment philosophy and a high-profile industry focus, can you comment on how important is it for you as an active investor in the high-yield market?Finally, could you talk us through any big risks or watchpoints that are on your investment horizon for the remainder of the year?

High yield’s summer run – Tim Leary

Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets.We asked Polina:After prolonged negotiations between the Argentine government and major bond holder groups, there seemed to be a swift end to restructuring talks. Firstly, were you surprised by the eventual agreement and secondly, what are the broader implications for the country?Considering the unfortunate circumstances surrounding the Beirut port explosion, how do you evaluate governance risk within the investment process?Staying in the same region, some investors have perceived the recent bout of Turkish lira weakness as a sign that Turkey appears to be on the brink of another Balance of Payments crisis. How is the current landscape different to August 2018 when USD/TRY first went above 7?Turning to technicals; flows into Emerging Market-dedicated bond funds have remained positive over the last few months, while EM-dedicated equity funds continue to see outflows. Do you expect this trend to continue?

Emerging Markets outlook – Polina Kurdyavko

David Riley joins us on the BlueBay Insights podcast to update us on the latest economic data, US-China relations and the upcoming US elections.We asked David:Since we last spoke there has been a raft of economic data. What does it tell us about the outlook for the global economy?In the second quarter, the UK economy contracted more than any other major economy – what’s the outlook for the UK?US-China relations appear to be going from bad to worse – why aren’t the markets reacting?You've just mentioned the US elections. Do you think that the market is now expecting a Biden victory?

From bad to worse – David Riley

David Riley joins us on the BlueBay Insights podcast to update us on the latest quarterly GDP figures from the US.We asked David:A theme that has emerged in markets is the weakness of the US dollar. Are we entering a dollar bear market?You mentioned the rise in the gold price and worries about central banks debasing currencies with money printing. What are the implications for fixed income investors?Our discussion is highlighting just how important the Fed is for markets. What is your takeaway from the latest Fed meeting?The second quarter US GDP figures have just been released – what did you learn?

A weaker US dollar – David Riley

David Riley joins us on the BlueBay Insights podcast to talk about fiscal stimulus, the Fed, and yield curve control.We asked David:What’s your view on the agreement by EU leaders on a new European Recovery fund?Is the package big enough to support the recovery in the EU economy? You mentioned US fiscal stimulus. Congress is debating another budget package. What is the latest and what do you expect?The Fed meets next week. What are you expecting?What is yield curve control?

Fiscal stimulus – David Riley

Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets.We asked Polina:Over the past weekend the Ecuadorian government reached an agreement in principle with a major group of private bondholders which included BlueBay. How does this negotiation compare with previous restructuring talks that you have been involved in?Do you expect the sovereign debt re-profiling theme to be one of your key focus areas for the rest of the year? What other countries will be talking to creditors and how significant is Ecuador’s precedent for other negotiations?How has the easing of lockdown restrictions impacted economic activity in various Emerging Market countries?So far this calendar year has been very atypical in many aspects. Do you expect any of the normal summer seasonality trends in terms of liquidity and asset price volatility to apply this time around?And lastly can you comment on the opportunities you are seeing on the more illiquid side of the EM investment universe.

David Riley joins us on the BlueBay Insights podcast to talk about the latest jobs data from the US and the likelihood of a V shaped recovery.We asked David:There has been a lot of focus on the recent upturn in the number of COVID infections in the US.  Are investors right to be concerned or are these worries exaggerated?What are the implications for the US economy and recovery?You have stressed the importance of the jobs market for the recovery. Can you explain why it is so key to your view on the shape of the recovery?What does the latest jobs data for the US tell us?

A V shaped recovery or a long haul? – David Riley

Andrzej Skiba joins us on the BlueBay Insights podcast to share his views on credit.We asked Andrzej:We saw a performance reversal during May with the US overtaking Europe – what drove this regional switch? What drove the three-week performance run and why did it end?Fallen angels remain topical – how are you investing here? Are you seeing any immediate cross-over opportunities post-Covid?Lower-rated securities have generally trailed the overall high-yield rebound, although we’ve recently seen some signs of triple Cs outpacing double Bs – can you comment on what’s happening here?How is the high-yield sector performance in emerging markets? Are you considering making any changes to your underweight positioning there?Overall, which regions and sectors do you currently favour in your portfolio?

Credit update – Andrzej Skiba

David Riley joins us on the BlueBay Insights podcast to share his thoughts on the latest macroeconomic data and key themes for the second half of 2020.We asked David:What can investors take from the latest round of macroeconomic data?As we are in the middle of June, what do you think are the key themes for investors in the second half of the year?You mentioned Brexit and as you forecasted, the Bank of England announced an increase in its bond buying. What is the outlook for UK assets in your view?

Key themes for the second half of the year – David Riley

Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets.We asked Polina:Emerging market currencies have risen by around 7% relative to the US dollar over the past month. Do you think they are simply rebounding to pre sell-off levels or is this the beginning of a more sustained rally?Emerging market sovereign hard-currency bond issuance is running at record pace compared to prior years. Should investors interpret that positively or negatively?From a corporate perspective, which companies are the most resilient to the current economic conditions and similarly which ones are showing signs of stress?In terms of investment opportunities across emerging market debt, do you have preferred credit-rating or maturity bucket?How would summarise your investment view as we move into the second half of 2020?

Polina Kurdyavko joins us on the BlueBay Insights podcast to share her perspectives on Emerging Markets .We asked Polina:Emerging market currencies have risen by around 7% relative to the US dollar over the past month. Do you think they are simply rebounding to pre sell-off levels or is this the beginning of a more sustained rally? Emerging market sovereign hard-currency bond issuance is running at record pace compared to prior years. Should investors interpret that positively or negatively? From a corporate perspective, which companies are the most resilient to the current economic conditions and similarly which ones are showing signs of stress? In terms of investment opportunities across emerging market debt, do you have preferred credit-rating or maturity buckets? How would summarise your investment view as we move into the second half of 2020? 

BlueBay experts discuss their views on the market today.

hubhopper

BlueBay Insights

hubhopper