Fixed-income solutions for a challenging investment backdrop

The current macro backdrop continues to create tough conditions for investors who rely on fixed income for both income and returns.

Years of financial repression from governments and central banks, rising national debt levels, and the threat of increasing default rates have all led to increasingly paltry returns on so-called ‘safe-haven’ government bonds, while the potential return of inflation means investors in bond  strategies unable to adapt to the changing backdrop may run the risk of seeing returns eroded over time.

At the same time, there is a growing demand for environmental, social and governance (ESG) considerations to play an increasingly important role within the investment process for bond managers.

This article will seek to show how Newton’s Global Dynamic Bond and Global Dynamic Bond Income strategies have a number of attributes that could prove useful in terms of mitigating the concerns raised above, and explain why they are worth consideration by superannuation funds  that need solutions for a range of challenges posed by the current backdrop.

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Newton Investment Management is a global investment management firm, providing, in partnership with its parent company BNY Mellon Investment Management, a focused range of investment strategies to public and private-sector superannuation funds, corporations, and individuals. We run a broad range of multi-asset, fixed-income and equity strategies, and have particular expertise in absolute-return, income-focused, high-conviction and sustainable investing. We use a global thematic approach to help achieve long-term perspective. Our themes inform both the rigorous fundamental analysis carried out by our experienced global research analysts, and the construction of portfolios designed to meet our clients’ requirements. In addition to financial measures, we evaluate factors such as environmental impacts, social standards, and the effectiveness of people in charge. We believe this ‘purposeful ownership’ approach allows us to better manage risk and make more informed investment decisions, helping investors worldwide meet their desired investment outcomes.