Following the bond market’s recent beating, term yields have already priced in aggressive Fed rate hikes, positioning core bonds to effectively diversify credit risk.
Strong funded ratios and higher interest rates are prompting many corporate pension plan sponsors to shift assets to LDI strategies.
January 1, 2022 marked a significant milestone in the transition from LIBOR to alternative reference rates.
The devastating events that continue to unfold in the conflict between Ukraine and Russia have led to steep price declines in both countries’ financial markets.
The market’s expectations for curve flattening may be excessive, as the timing of rate hikes and the aggressiveness of the Federal Reserve are still open to debate.
The fundamental and technical loan picture remained favorable in Q4-2021, supporting CLO performance with sustained improvement in structural/market value metrics.
Improved funded status is driving conversations around the inclusion of non-traditional fixed income assets in ALM modeling, including investment grade private placements, CMLs and CMOs.
We believe that the new levels of home prices reached during the housing rally not only will be sustained, but will be a positive force pulling us through inevitable bouts of uncertainty in markets and the economy.
The market’s curve flattening expectations may be excessive, as the timing of the hikes and aggressiveness of the U.S. Federal Reserve are still open to debate.
The prevailing themes in 2021 were economies reopening, corporate balance sheet repair and strong capital market activity. These trends contributed to a general reversal of the myriad headwinds that marked a tumultuous 2020.
Diversification can relieve long duration corporate bonds from being the only way LDI plan sponsors meet spread or duration targets. Complementing with derivatives, IGPPs, CMLs and CMOs can help create a more efficient and effective portfolio.
Covid-19 presented a real-time test of private credit’s ability to withstand stress. Voya met the challenge through its team experience and proactive response.
These are the seven major themes influencing positioning across our fixed income portfolios in the first half of 2022.