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Read regular news updates, research papers, investment strategy updates & thought pieces from some of First State Investments leading experts.

In January, our Asia Fixed Income team provided an outlook for the asset class in 2020. Since then, developments associated with coronavirus have dominated attention and affected sentiment towards financial markets worldwide. In this update, Jamie Grant, Head of Emerging Market and Asia Fixed Income, explains why the disease has attracted so much attention and outlines some of the changes that have been made to First State Investments’ Asian Fixed Income portfolios as a result.

Discover emerging market equities, offering a global opportunity set with the on-the-ground research and skill of specialist emerging markets investors.

With geopolitical events dominating 2016, emerging markets debt once again proved resilient under stress, rallying strongly after a steep sell-off in November.

Our Emerging Market Debt team provide a review of the first quarter of 2014, including an update on the global environment and market-drivers for Emerging market debt in 2014.

Emerging market (EM) debt returned 0.5% (in US Dollar terms) in July reflecting income. The risk premium on EM debt increased over the month, with the spread on the index rising to 367 basis points (bps). The yield was virtually unchanged at 5.8%, while US 10-year Treasury yields rallied 18bps to 2.17%.

Global asset management group focused on providing high quality, long-term investment capabilities to clients. We bring together independent teams of active, specialist investors who share a common commitment to responsible investment principles.

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There have been times, over the last couple of years, when we have felt like a complete muggle. Darker forces (QE and the rise of the machines), have clearly been in the ascendancy.

Global yields moved higher in January while yield curves steepened. The US ten year yield peaked at 2.95% in late February, up 0.55% from 2.40% at the start of the quarter. European and Australian yields followed a similar pattern, with 10YR bunds topping out at 0.74% and Australian 10YR yields reaching 2.94%.

Global yields moved higher in January while yield curves steepened. The US ten year yield peaked at 2.95% in late February, up 0.55% from 2.40% at the start of the quarter. European and Australian yields followed a similar pattern, with 10YR bunds topping out at 0.74% and Australian 10YR yields reaching 2.94%.

In our last client update, written through the depths of Covid-despair, we observed that real life and the world of markets are seldom so intimately entwined. With markets swinging violently to the downside on a riptide of fear, it was clear even then that activity was being driven by short-term anxiety rather than a real evaluation of Asia’s longer-term value-accretion prospects.

This article provides a review of the current markets as well as views on what the fourth quarter could hold. Portfolio performance details are also highlighted, including interest rates and FX, inflation markets, securitized sectors and corporate markets. Bond markets experienced several trend reversals during the third quarter with rates and credit markets moving independently. The Bloomberg Barclays US Aggregate index returned 0.85%. During July, spread sectors continued their extended rally that began in February 2016. By late July, IG corporate spreads were within 5 bps of their post-crisis tights set in 2014. Volatility was muted throughout the market with the VIX equity volatility index and MOVE interest rate volatility index both setting multi-decade lows. Tight spreads and low volatility felt justified as liquidity risk fell and the US economy began exceeding expectations. August marked a turnaround, as spread markets did not have a cushion to buffer duel threats from US politics and North Korea. The investigation into the Trump Campaign’s dealings with Russia reached a fever pitch in early August as special counsel Robert Mueller impaneled a grand jury. In a rare act of bipartisanship, Congress passed sanctions on Russia with veto-proof majorities and took preemptive action to limit Trump’s ability to fire Mueller. Meanwhile, North Korea accelerated its nuclear missile testing as the UN increased sanctions. Negative headlines receded into the background in September, allowing the spread rally to resume. High yield spreads tightened during the quarter by 17 bps to +347 over Treasuries, while IG corporate bond spreads tightened 8 bps to +101. EM spreads had a strong quarter, tightening 22 bps to +246. Mortgage spreads also outperformed, spurred on by record low interest rate volatility. US and most European interest rates fell in July and August before rising in September.

Global interest rates rose during the quarter, led by the US. The US ten year yield climbed from 2.86% to 3.06

Global interest rates rose during the quarter, led by the US. The US ten year yield climbed from 2.86% to 3.06%.

All of us have been brutally confronted by a new reality in the last few months. It has certainly been crude, with financial markets swinging around on a riptide of greed and fear, as we the participants have vacillated between elation and despair. It is not surprising. Life and the world of markets are seldom so intimately entwined.

In this Q2 2019 Quarterly Update we review the increasingly dovish attitudes adopted by central banks and the “whatever it takes” commitment to monetary stimulus, the general high yield market, our portfolio positioning and the top contributors and detractors from our five High Yield Fixed Income Strategies.

Government fiscal and debt metrics are strong but pro-growth fiscal policy risks deterioration. At the point they are forced into using fiscal buffers, the market will have repriced the risk sharply.

Theoretically, a fast-growing economy bodes well for corporate earnings and stock prices, and vice versa. Because of this, investors often cite Japan’s weak economy and deflationary environment as reasons they have been reluctant to invest in Japan. However, the data suggests that these concerns may be unfounded. Although Japan’s nominal GDP has grown by just 4% since the late ‘90s peak, Japan Inc’s corporate profits have grown by 180% over the same period.

The First State Japan Equity Fund invests in a concentrated portfolio of high-quality companies with strong management teams, dominant franchises and conservative financials. As long term, conservative investors, we seek to invest in companies that we believe will have high return on invested capital, strong and sustainable growth, and high earnings visibility.