The BBB bond market, neither cuts nor hikes, and recession warnings?

Genuine Impact
Jul 2 · 3 min read
Alister Sneddon, CTO

Here are the top 3 insights for July 2nd, prepared by Alister, our CTO.

Today’s Brief

  • Janus Henderson: Assessing the BBB Bond Market — It’s Not as Bad as it Seems
  • BWS: Neither cuts nor hikes. So far.
  • Franklin Templeton: Should Markets Heed Recession Warnings?
  • BBB-rated debt now represents roughly half of the U.S. investment-grade market, which has sparked fears of widespread downgrades.
  • While caution is warranted, we believe compelling investment opportunities still exist and the concerns surrounding the sector are overblown.
  • Assessing an industry’s vulnerability to an economic downturn and an individual issuer’s ability to delever are the keys to identifying opportunities in BBB-rated debt.

Genuine Scores for the top 3 US focused Bond funds

  • iShares Ultra Short-Term Bond ETF, 100
  • PGIM Core Short-Term Bond Fund, 100
  • GMO US Treasury Fund, 100
  • Interest-rate hikes appear to be off the table for now and the market already expects rate cuts in the U.S. this year. We do not.
  • We expect most government-bond yields to move sideways. This makes U.S. sovereigns interesting again.
  • Elsewhere, our focus is on corporate and emerging-market bonds with attractive yields.

Genuine Scores for top 3 Bond funds

  • iShares Ultra Short-Term Bond ETF, 100
  • PGIM Core Short-Term Bond Fund, 100
  • BlueOrchard Microfinance, 100
  • Amid a renewed US-China trade spat and additional tariff tensions between the United States and Mexico, investor concerns about a possible recession have heightened, according to Ed Perks, executive vice president and chief investment officer, Franklin Templeton Multi-Asset Solutions.
  • He discusses how markets are reacting to the possibility of a US recession and explains why he favours a defensive stance for the multi-asset space during this period.

Genuine Scores for the top 3 Equity funds

  • Versus Capital Multi-Manager Real Estate, 99
  • Fidelity Series Real Estate Income Fund, 95
  • Akre Focus Fund, 93

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All the best,
Alister and the Genuine Impact Team

p.s. all Genuine Scores are accurate as of the 14th of June

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