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  • February 1, 2019
    Macroeconomics & Risk
    Eoin Murray
    Investors scanning the risk universe observed traces of volatility in February and then calm skies until the end of the third quarter. The scenario has changed, with equity markets flaring in October and November. Seasoned asset-gazers may not be surprised – in our view, market pressures have been building for some time amid slowing growth and trade tensions – and we continue to recommend that investors consider the full gamut of risks and commit to a long-term view as they chart a course ahead.
  • December 18, 2018
    Macroeconomics & Risk
    Eoin Murray
    Investors scanning the risk universe observed traces of volatility in February and then calm skies until the end of the third quarter. The scenario has changed, with equity markets flaring in October and November. Seasoned asset-gazers may not be surprised – in our view, market pressures have been building for some time amid slowing growth and trade tensions – and we continue to recommend that investors consider the full gamut of risks and commit to a long-term view as they chart a course ahead.
  • Eoin Murray
    Trade tensions, Brexit, the #MeToo movement and climate change have dominated news flow in 2018.
  • November 19, 2018
    Macroeconomics & Risk
    Eoin Murray
    Trump, tariffs, trade wars, terrorism and tech: a decade on from peak global financial crisis, this is where we are today. The more important question for investors, however, is where to next.
  • October 25, 2018
    Macroeconomics & Risk
    Eoin Murray
    Risk morphs, and investment strategies must evolve in response. We have expanded our set of analytical metrics to include environmental, social and governance concerns to gain an even broader view of the changing environment – and to learn what adaptations we must make next. As experienced investors know, risk takes on many forms. Over the course of many decades investment professionals have categorised several varieties of these distinct market animals. In probabilistic exercises, they have pinned down their essential characteristics like butterflies in display cases. While museum-quality historical examples serve a useful purpose for market observers and participants, identifying risks in the wild requires a more sophisticated set of tools. We have met this challenge with our ever-evolving five-factor analysis matrix, which aims to capture the often-subtle signs of incipient risk from multiple observation platforms. Our five core vantage points – covering volatility, correlation, stretch, liquidity and event risks – have been regularly supplied with new viewing tools to improve the quality of data collection and analysis.
  • October 9, 2018
    Fixed Income
    Eoin Murray
    In this podcast, Eoin Murray, Head of Investment, and Andrey Kuznetsov, Portfolio Manager in the Hermes Credit team, discuss the impressive growth of credit markets beyond the US and the compelling opportunities this presents for investors seeking greater diversification.
  • September 28, 2018
    Fixed Income Stewardship
    Eoin Murray
    In this podcast, Eoin Murray, Head of Investment, is joined by Mitch Reznick, Co-Head of Credit and Head of Credit Research and Hans-Christoph Hirt, Head of Hermes EOS and Stewardship Services to discuss the first instalment in a two-part paper we have recently published titled ‘we can all get along’.
  • September 19, 2018
    Macroeconomics & Risk
    Eoin Murray
    In his latest note, Eoin Murray, Head of Investment at Hermes Investment Management, discusses the four words he dreads more than anything. There are plenty of words people in investment use to convince themselves – or others – that things are going to be OK. “This trade can’t fail”, “the market is rational”, “equities always go up”, are prime examples. But for me, the worst is: “This time it’s different.” Why? It invariably isn’t. The latest use of this maxim is by people unconcerned about the possibility of the yield curve inverting. The yield curve tracks short and long-term interest rates that fuel the traditional banking model. Short-term rates are usually lower, so it is cheaper for banks to take deposits, and the longer-term rates are higher, so they can issue loans and take a turn on the difference. Any disruption to this system sees the model break down. An inversion of the yield curve occurs when short-term interest rates are higher than long-term ones – it has been a reliable predictor of recessions. Of course there are many different ways of measuring the steepness of the yield curve, or the term spread. A recent paper by the Federal Reserve Bank of San Francisco suggests that it doesn’t actually matter whether we use 30-year minus 3-month, 10-year minus 2-year, or even attempt to include expectations:
  • September 3, 2018
    Macroeconomics & Risk
    Eoin Murray
    “There are as many worlds as there are kinds of days, and as an opal changes its colours and its fire to match the nature of a day, so do I.” In 1960, Nobel Prize-winning US author John Steinbeck set out on a road journey around his home country to see what he could see; to note any changes in the vast nation he hadn’t observed up close for decades. Aged 58 and in ill-health, Steinbeck was nonetheless willing to confront the reality of a rapidly-changing US from the driver’s seat of a jerry-built house truck and only a ‘middle-aged poodle’ called Charley for company. While his best-selling recount of the trip was tinged with nostalgia and tips for poodle maintenance, the writer didn’t let the past blot out a clear-eyed view of the present. “A journey is a person in itself; no two are alike,” Steinbeck wrote. Investors would do well to bear this advice in mind as they venture through the second half of 2018. In the latest Hermes Market Risk Insights report, Journeying through a changing risk environment, Eoin Murray, Head of Investment at Hermes Investment Management, explores the six key risks investors must navigate through during the latter part of the year.