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Market & Views
Global Credit Absolute Return - April 2013 - Mark Wauton
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UK Secondary assets
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| Chris Urwin, Global Research Manager - Real Estate |
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Destined for growth UK and European Infrastructure |
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Darren Sriharan, Global Real Estate Analyst Download Investors Journal article: Infrastructure Investing in the UK and Continental Europe |
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Nearing a turning point: UK real estate outlook 2013 |
| Chris Urwin, Global Research Manager - Real Estate |
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Global Real Estate Outlook |
| Chris Urwin, Global Research Manager - Real Estate |
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Investment Outlook for 2013 |
| Shahid Ikram, Chief Investment Officer: "I expect the year to shape up quite differently across geographies with a reasonable economic picture in the US and Asia on the one hand, and a grimmer picture in Europe and the UK on the other hand." |
| Fixed Income Relative Value Targeting equity-like returns with lower variability |
| Raphaelle Moysan, Fixed Income Client Portfolio Manager: "In reviewing the 2012 performance of their absolute return portfolios, many investors feel they were too conservatively positioned and did not appropriately capture the enviable upside in risk assets last year. For 2013, investors want equity-like returns, but with lower variability." |
| Credit 2013 - time for absolute return |
| Mark Wauton, Head of Credit: "2012 was a rewarding year for credit investors, with returns of around 11% from global investment-grade credit and 19% from global high yield. The outlook for credit markets remains healthy. Companies still have large amounts of cash on their balance sheets, projected default rates remain low, and the appetite for new issuance shows no signs of diminishing." |
| Convertibles to benefit from improving fundamentals in 2013 |
| Justin Craib-Cox, Fund Manager Convertible Fund Team: "Because convertibles are structured as bonds with an embedded option to convert into equity, they can offer investors up to two thirds of equity market upside but with less downside risk." |
| Why 2013 is the year to go RED |
| James Tarry, Fund Manager Real Estate Debt: "New, stricter banking regulations have created tremendous opportunities for some investors. Nowhere is this more evident than in the real estate debt arena where the need for banks to deleverage and shore up capital levels has opened the door to a new breed of debt investors. It’s a huge opportunity with 50% of the £300 billion UK real estate debt market due for refinancing over the next five years alone." |
| Infrastructure reaches tipping point |
| Laurence Monnier, Infrastructure Fund Manager: "2013 looks poised to be a watershed year for investment into infrastructure debt. Whereas the banks once dominated financing here, Basel III has forced them to retreat and to deliver their balance sheets creating enormous opportunities in both the primary and secondary markets." |
| Global Real Estate Multi Manager: Three key themes for an uncertain world |
| John Gellatly, Global Real Estate Multi Manager: "From a macro economic perspective, while the outlook has improved there remains considerable uncertainty. This naturally translates into a cautionary real estate outlook." |
| Aviva Lime Fund* |
| Renos Booth, Fund Manager, Lime Property Fund: "Since its launch in 2004, the Lime Fund’s done a great job in delivering what it set out to do – provide investors with a highly stable, inflation-linked income from a well diversified, ungeared portfolio of real estate holdings. The fund’s low volatility has seen it consistently deliver over 5.5% pa since inception." |
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The importance of good corporate governance |
| Steve Waygood, Chief Responsible Investment Officer: "We understand that our clients want to make money; we also understand that they want to do that in a way that has integrity." |
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Income still king in global real estate market |
| Phill Ellis, Client Portfolio Director: "Thanks to the economic backdrop, European markets remain muted with the exception of major capitals such as London and Paris. Whilst we expect the UK to recover slowly this year, we still prefer income-generating assets in core northern European and Nordic regions, and we remain underweight in Europe’s southern markets where risks are much higher." |
| Facing up to inflation |
| Trevor Welsh, Head of Inflation :"Defined benefit pension schemes’ liabilities – the commitments they have made to their scheme members – are linked to inflation. Inflation hedging has always been a key concern for pension schemes, but today it is more important than ever." |
| Equities - poised for the great rotation? |
| Jerome Nunan, Equities Portfolio Manager: "Markets have started 2013 strongly, continuing the rally that characterised them for much the second half of 2012." |
| Economic update UK: It's not all bad news |
| Stewart Robertson, Senior Economist: "Like many economists, I was delighted by the UK’s bumper GDP growth of 0.9% in Q3 2012. This almost completely reversed the downswing of the previous three quarters." |
| Another winter of discontent for Europe |
| Stewart Robertson, Senior Economist: "After a fifth consecutive quarterly decline in European GDP we’re likely to see the economy retreating for at least two more quarters to come. However, the ECB’s commitment to “backstop” markets didn’t just stem the tide by reducing short-term borrowing costs." |