Market attractiveness bonds: USA ahead of Emerging Markets ahead of Europe

The USA is the benchmark for the markets: the outlook is great on the equity side, but even more so for bonds. “US government bonds have not only shown excellent performance since the beginning of the year, they are also a first-class insurance instrument against periods of stress”, said Carsten Gerlinger, Vice President of Moventum AM.

Unless the economic situation in the USA worsens dramatically, there is no danger of any noticeable decline in yields. “On the contrary, yields could even rise slightly if the economy recovers”, Gerlinger pointed out. This is offset by bond purchases by the US Federal Reserve, however, so any change should be rather small.

High yields are also being supported by the Fed’s announcement that it intends to buy such paper as well. No notable defaults have been registered in the context of the rapidly occurring recession to date. “Basically, however, we are experiencing higher risks in this market segment in such recession periods”, Gerlinger explained. “We expect the segment to continue to be characterised by higher volatility, and we consider US corporates to be attractive compared to government bonds.”

Emerging market bonds are largely influenced in their development by the US dollar and US interest rates. “The Fed rate benefits these bonds, and in addition they offer an attractive spread, particularly bonds in hard currencies”, Gerlinger said. Only falling oil prices might cause severe problems for some countries, with corresponding negative effects on the bonds. “In any event, we are favouring hard-currency bonds and these mainly from Asia”, stated Gerlinger.

In Europe, the pandemic has also depressed yields on German government bonds. “At the current time, bonds are really only suitable as an insurance instrument against periods of stress”, according to Gerlinger. The fiscal and monetary policy measures adopted failed to lead to rising yields, which remains unattractive in absolute terms. Price gains are only possible if there is an increase in risk. “The fiscal union in the EU, which is foreseeable to come through the back door, favours government bonds from the peripheral states, which in turn may even lead to slightly rising yields on German government bonds”, said Gerlinger.

Unconstrained strategies are increasingly gaining importance because of the uncertainty about further developments. “With their flexible investment policy, they have the advantage of reacting quickly to market changes”, Gerlinger concluded.

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Über Moventum S.C.A

Moventum Asset Management S.A. (Moventum AM) is a wholly owned subsidiary of Moventum S.C.A. The management company, in which Moventum’s asset management expertise has been concentrated since the beginning of 2019, manages Moventum’s own funds and individual mandates as part of its asset management portfolios.

As an independent financial service partner, Moventum S.C.A. is specifically addressing financial service providers such as financial advisors, asset managers, institutional investors, and NGOs. Its services in asset management and asset building include a web-based securities investment platform focusing on funds, relieving financial advisors of administrative tasks, and integrating custody and account management for individual investors. Investment management tools, regulatory-compliant reporting and individual securities services are also part of the full-service range. Standardised fund asset management service with a sustainable, successful track record for the relevant risk/reward profiles complements the offering. The Moventum Group also enables institutional investors to outsource securities processing in its entirety. The MoventumOffice investment platform offers access to more than 9,000 investment products including funds and ETFs from more than 400 investment firms, including the use of analysis, reporting and support tools.

Firmenkontakt und Herausgeber der Meldung:

Moventum S.C.A
12, rue Eugène Ruppert
L2453 Luxembourg
Telefon: +352 (26154) 200

Bodo Scheffels
news & numbers GmbH
Telefon: +49 (178) 4980733
Isabel Melahn
newskontor GmbH
Telefon: +49 (170) 28172-87
Moventum S.C.A.
Telefon: +352 (26154) 200
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