U.S. economic growth has benefited heavily from government stimulus spending and re-stocking of business inventories. We expect continued economic growth of 2.0% to 3.0%. With heightened volatility and continued uncertainty in Europe, the waters will remain choppy. The fundamental environment remains supportive of future credit performance, while technical market conditions warrant conservative positioning in the short term. Canadian growth will be better, powered by a more resilient consumer, a buoyant housing market and a strong resource economy.
read fixed income commentary
June 30, 2010
The convertible marketplace retreated in the second quarter – down 5.8% – as underlying equities fell sharply and spreads widened out. Investor appetite for risk has curbed as growth concerns in the U.S. and China have taken center stage along with ongoing European debt problems. We currently like hard assets, specifically gold. We also are overweight in healthcare and defense. We remain underweight in cyclical and financials, because slower growth and high leverage will negatively affect these sectors.
read convertible securities commentary
June 30, 2010
The U.S. continued to benefit from fiscal and monetary stimulus as well as inventory rebuilding in the second quarter of 2010. We expect moderate 2.0% to 3.0% growth in the second half, as the impact of fiscal and monetary stimulus fades and small businesses and households suffer from lack of credit availability.
read core aggregate commentary
June 30, 2010
In the second quarter of 2010, the Barclays Capital U.S. High Yield Constrained Index recorded the lowest and first negative quarterly return since 2009 of -0.06%, bringing the year-to-date return to 4.45%. We believe the recent re-pricing of risk has made the valuations of many high yield companies more attractive. With yields at around 9.0%, spreads above historical averages and expectations for default rates to drop below 2.0%, the high yield market sits on a comfortable cushion should investors start de-risking again. In addition, we believe the corporate fundamental outlook will remain positive, and U.S. economic news will continue to be robust. We recommend a moderate overweight to high yield with a focus on BB and B rated bonds.
read high yield commentary
June 30, 2010
The Barclays U. S. Credit Index underperformed duration-neutral Treasuries for the quarter by 233 basis points. Despite solid credit fundamentals, we expect demand for investment grade credit to be muted by risk aversion. We foresee economic growth of a moderate 2.0% to 3.0% over the next 12 to 18 months.
read investment grade commentary
June 30, 2010
According to Aviva Investors data, new issue volume for traditional private fixed income exceeded $11 billion in the second quarter of 2010. This was an increase from the $7 billion level in the first quarter. We expect private debt issuance to remain strong for the remainder of 2010. Investors should continue to see a variety of investment opportunities across industries and countries.
read private fixed income commentary
June 30, 2010
Weekly Capital Markets for July 26, 2010
Corporate earnings releases and economic data were both mixed in a week that experienced general improvement across the financial markets.
> read more
Weekly Capital Markets for July 19, 2010
Last week was another roller coaster ride on the financial markets.
> read more
Questions around European Union viability, the Gaza blockade, imminent financial reform, a China slowdown and the Gulf oil spill are completely consuming all forms of mass communication.
read more
Given the inherent uncertainty involved in predicting the erratic short-term behaviour of financial markets, there is no substitute for a thorough due diligence process. Only by understanding a particular manager’s investment philosophy and process is it possible to accurately gauge the likelihood they will be able to regularly hit stated performance objectives.
read more
Regulatory reform continues to be a prominent topic in regard to hedge funds.
read more
The hedge fund industry is likely to continue seeing consolidations, as banks look to shed risk, something they might be forced to do if the Obama administration is successful in its “Volcker rule” proposal.
read more