Lessons From Canada’s Top Pension Managers

Summary Many studies have documented the fact that market participants in many regions, including Canada, invest more in the companies from their home country than would be warranted by their country’s share of global markets.  Three of Canada’s largest and most sophisticated pension funds have cut Canadian exposure in their equity allocations.  Yet private Canadian Read more […]

Oil’s Price Rise Boosts All Equity Sectors, But One

The S&P GSCI Crude Oil Total Return is up 15.2%, its biggest six day gain, ending Aug. 18, 2016, since the six day gain of 16.1%, ending on Apr. 13, 2016.  As both the IMF (International Monetary Fund) and IEA (International Energy Agency) consider the oil price as a major input to global GDP estimates, and the IMF states the Read more […]

The VIX is Low, But Should You Fasten Your Seatbelt?

VIX has spent the whole of August below 14, and remains – at time of writing – close to its lowest levels in two years.  But the present calm may be dependent on a short-term seasonal effect; and we are approaching the traditional period where it ends. August is traditionally a quiet month for U.S. Read more […]

The CBLO Rate: Its Movements, Effects, and Future

In my blog “Introducing the CBLO Rate,” we discussed what the collateralized borrowing and lending obligations (CBLO) rate is and how the S&P BSE Liquid Rate Index would be useful for market participants.  In this post, let’s discuss the history of the CBLO rate and nature of CBLO rate movement. The repo rate is the Read more […]

Performance Trends in the U.K. Gilt and Corporate Bond Markets

On Aug. 4, 2016, the Bank of England cut its benchmark rate by 25 bps to a low of 0.25%.  This move, coupled with its announcement of a GBP 70 billion expansion of quantitative easing, with GBP 10 billion committed for the purchase of investment-grade corporate bonds, is furthering the positive performance of these asset Read more […]

Introducing the CBLO Rate

Bankers and corporate treasury managers may be facing the challenge of parking excess cash for a short period, maybe overnight, to earn some income or interest without compromising the security of the funds.  Similarly, there are many banks and corporates that need cash in the short term at the lowest possible rate.  While there are Read more […]

Think Rates Will Stay Low? Consider Preferreds Over High Yield Bonds

As income seekers are forced to take additional risk to meet income needs in today’s near zero interest rate environment, preferreds may be considered over high yield bonds for the following five reasons: 1. Significantly higher credit quality 2. Comparable yields and lower volatility 3. Tax advantages on income 4. Call risk appears limited in Read more […]

Passive Investing can be good for your retirement and health

In the print edition of the Wall Street Journal this weekend, there were two unrelated stories side by side, one about a firm’s self-dealing with 401(k) and another about Medicare.  After reading them together it became clear that these seeming unrelated stories unintentionally show that while active funds can be bad for your retirement and Read more […]

ESG Implications and the Brexit – An Uncertain Future or a New Paradigm Shift?

On June 23, 2016, the U.K. held a public vote [1] on whether to leave the European Union (EU), which led to a so-called “Brexit,” bringing a seismic shock to British, European, and global politics. Perhaps the biggest uncertainty is the future shape of European politics. Currently, we can only speculate what the impact might Read more […]

Asian Fixed Income: The Philippines After the Key Overnight Rate Cut

The Central Bank of the Philippines unexpectedly lowered the key overnight rate to 3% from 4% on June 3, 2016, as it shifted to an interest rate corridor system to “improve the transmission of monetary policy.”[1]  Sovereign bonds have had a strong rally since then; the total return rose 10.82% YTD, while the yield-to-maturity tightened Read more […]