Insights

Highlights from the week of April 29 – May 5, 2022.

The key CLO themes in Q1 2022 were a smooth transition to SOFR, relative outperformance versus other comparable asset classes, widening in liability spreads towards the back end of the quarter, elevated redemption activity early on, and notable deceleration in US issuance volume in March.

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.

An effective factor investing strategy should be both contextual, that is, able to take into account differences across business segments, and adaptable as markets change over time.

Strong funded ratios and higher interest rates are prompting many corporate pension plan sponsors to shift assets to LDI strategies. If you’re still waiting, consider a hedging portfolio built on public corporate credit, complemented with non-traditional hedging assets.

January 1, 2022 marked a significant milestone in the transition from LIBOR to alternative reference rates. 

Knowing the stakes, the Fed is likely to keep surprises to a minimum.

Despite our view that a U.S. economic contraction is avoidable in the near term, the outlook for equities has deteriorated since the beginning of the year and we think this sour spot is likely to last as monetary policy becomes tighter.

Voya’s large cap value team believes that excess capital yield (ECY) provides a holistic view of the amount of capital a company has available to create value. We apply our ECY framework to evaluate stocks from a relative value perspective and construct a diversified portfolio with a higher yield than the benchmark.

A research framework to help investors understand how securitized credit fits into a broader investment portfolio.