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PNC Capital Advisors Announces Sale of Portions of its Business to Federated Investors

Municipal Commentary, Third Quarter 2019

Fixed Income Commentary, Third Quarter 2019

 

Featured Perspectives

SOFR In - LIBOR Out

The London Interbank Offered Rate (LIBOR), the globally referenced benchmark for interbank lending, is in the early stages of being phased out by UK regulators following a rate-setting scandal in 2012. While a new benchmark rate has yet to be broadly agreed upon, we believe the Secured Overnight Financing Rate (SOFR) will likely become the dominant benchmark rate in the future.

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Are Recent Corporate Liability Management Deals a Passing Fad or Persistent Trend?

Low rates and easing financial conditions have led to an advantageous environment for some corporate issuers to effect liability management transactions. If this market environment persists, we expect to see more of this type of activity.

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Market Volatility Creates Opportunities

Given recent market volatility, we are seeing examples of issuers emphasizing funding on an all-in yield basis as well as investor demands for concessions on new issues. We believe there are selective opportunities to invest in corporate bonds at comparatively attractive levels.

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The Fed's Great Balancing Act: A Policy Pivot

Many market participants anticipated the Fed to embark on a series of rate-cutting measures; however, recent stronger-than-expected economic data seemed to alleviate pressure on the Fed to move aggressively. Due to the global low-rate environment and the significantly reduced perception of the neutral rate, we believe the Fed will likely balance the expected impact of its actions on growth and economic conditions against a desire to maintain flexibility.

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Africa’s Economic Outlook: Beyond the Hype, Hope, and Despair

While the continent has witnessed numerous false dawns over the past 40 years, we believe it is fundamentally changing for the better. We are beginning to see investment opportunities and believe Africa will become an important consideration for global investors over the long term.

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Platte County, Missouri and the Risks of Complex Debt Portfolios

Platte County is not the first example where a general obligation bondholder has been affected by a lower-standing credit event. A thorough understanding of the debt structures in the local government sector can serve to mitigate or alleviate these derivative impacts within a fixed income credit portfolio.

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Increasing Investment Opportunities in the Middle East and North Africa

Driven by powerful demographic forces, global technological changes, and the long-term potential decline in oil demand, parts of the Middle East and North Africa region are undergoing monumental changes not seen for generations. We recently visited the region and have updated views on several countries, including Egypt, Saudi Arabia, and the United Arab Emirates. Based on our assessment, we believe the region is ripe for potential investments by our strategy.

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Behavioral Finance and Multi-Factor Investing

In this brief commentary, the Advantage Equity team discusses the importance of maintaining an awareness of behavioral biases in investing and how that awareness influences one of the core tenets of their philosophy and process - namely, the discipline instilled by their multi-factor model.

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