QUARTERLY INSIGHTS | APRIL 2021
FIXED INCOME PERSPECTIVES
Connecting you to the latest thinking from our
fixed income teams.
Themes in Focus
Global Head of Fixed Income Jim Cielinski discusses some of the factors shaping bond markets, from higher yields signalling stronger credit fundamentals to the increased investor interest in sustainability. Read more on these topics from our investment experts in the Perspectives that follow.
- We think inflation risks will prove transitory and believe the bulk of the interest rate move – and the pace of yield increases – is largely behind us.
- When the rise in yields is tied to the potential for economic growth, it can be positive for many parts of the credit market.
- A more permanent legacy of the pandemic is the increased interest in sustainable investing and the contribution fixed income investors can make in achieving more sustainable outcomes.
Fixed Income Capabilities
Janus Henderson Fixed Income provides active asset management solutions to help clients meet their investment objectives. Over the past four decades, our global investment teams have developed a wide range of product solutions to address clients’ varied and evolving needs. From core and multi-sector investing to more focused mandates, we offer innovative and differentiated techniques expressly designed to support our clients as they navigate each unique economic cycle. The capabilities of these teams are available through individual strategies or combined in custom-blended solutions.
While shared knowledge across teams and regions encourages collaboration and the debate of investment ideas, each team retains a defined level of flexibility within a disciplined construct. Environmental, Social and Governance (ESG) considerations, for example, are a key element of our credit research process and integrated within each team’s investment approach. Our portfolio construction processes are governed by a rigorous risk management framework with the intent of delivering stronger risk-adjusted returns. Further, we believe transparency is the foundation of true client partnerships; we seek to earn and maintain our clients’ confidence by delivering robust and repeatable investment processes and by providing firsthand insights from our investment professionals.
The Janus Henderson Fixed Income platform comprises 103 investment professionals situated in the UK, US and Australia. The teams are responsible for US$81.5 billion* in client assets.
*As of 31 December 2020.
Basis point: A Basis point is 1/100th of 1%. 1 bp = 0.01%, 100 bps = 1%.
Credit fundamentals: Factors that contributes to the valuation of a security, such as a company’s earnings or the evaluation of its management team.
Environmental, social and governance (ESG) are three key criteria used to evaluate a company’s ethical impact and sustainable practices.
Fiscal policy/stimulus: Government policy relating to setting tax rates and spending levels. It is separate from monetary policy, which is typically set by a central bank. Fiscal expansion (or ‘stimulus’) refers to an increase in government spending and/or a reduction in taxes. Fiscal austerity refers to raising taxes and/or cutting spending in an attempt to reduce government debt.
Inflation: The rate at which the prices of goods and services are rising in an economy. The CPI and RPI are two common measures. The opposite of deflation.
Output gap: The output gap is an economic measure of the difference between the actual output of an economy and its potential output. Potential output is the maximum amount of goods and services an economy can turn out when it is most efficient—that is, at full capacity.
Yield: The level of income on a security, typically expressed as a percentage rate.