Season 4 Episode 14:
Credit where its due with Jeff Boswell
8 March 2023
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Buckle up, folks - this week we're diving headfirst into the world of fixed income and corporate bonds with Jeff Boswell, a portfolio manager at Ninety One.
Corporate bonds have been on a rollercoaster ride lately, going from zero yields to plummeting values even for low-risk assets, and now returning to yield levels not seen since the days of yore. We'll be discussing all the juicy details, like whether yield or spread is the more important factor for investors to consider, and how to navigate the different parts of the market. We'll also be taking a look at how macro factors like the Covid-19 crash and recovery have influenced corporate bonds, and whether we're in a new cycle or just continuing an old one. We'll even be talking about rising stars and fallen angels - and no, we're not referring to a new reality TV show.
Trust us, this conversation with Jeff is one you won't want to miss, especially if you're an allocator looking to maximize your returns. So grab a drink, get comfy, and let's get ready to talk bonds. Bond voyage!
- We talk through the 2022 bond market sell off and what it meant for different parts of the market:
- Reset across credit markets and where it leaves things
- The conundrum: Spreads vs yields. Which is most important when looking at corporate bond investing
- The macro-environment and credit investing:
- Default cycles – where do we stand in the cycle
- Corporate fundamentals financial health, how are things looking?
- Which parts are the most vulnerable, we discuss some of the key choices facing fixed income investors
- Loans vs high yield
- Short vs long dated
- Financials/real estate
- Sterling vs euro vs US market
- Bond indices – is passive an option? What are the issues with it?
- Credit ratings and how they influence markets
- The division between investment grade (IG) and high Yield (HY) and what this means for the market
- How fallen angels and rising stars have driven the market recently and what they are
- How to think about market liquidity
- Sustainability – is it priced – what changes have you seen in the market
- Greenium? Risk or opportunity
- We reflect on trends in credit markets through Jeff’s career
What’s one thing you would like listeners to take away from this?
It's a good opportunity to invest in bonds now as yields have increased following last year's sell-off. However, it is a difficult environment due to uncertainty around the economic climate.
What is the most underappreciated thing?
The power of carry, the value of receiving a coupon and the stability in returns it provides.
Any recommendations for good books or podcasts:
Principles for Dealing with the Changing World Order: Why Nations Succeed or Fail - Ray Dalio
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