360°, Q1 2024:

Dispersion, disparity, duration

Will the stars align for active fixed income managers in 2024? In the first fixed income report of the new year, our credit team reflect on the year gone by and what may lie in store in the year ahead.

Video transcript

This 360° is timely in the sense that we are already into Q1 and we haven’t had to rapidly rewrite it due to some of the significant moves that we saw in Q4, and that has somewhat changed the game. We are quite constructive now on a lot of the spectrum, particularly the higher quality segments of fixed income. You’re going to hear a lot in the report from some pretty deep and diverse areas of expertise as to where we think the value is. But to summarise, if I can, we do think that the there is some significant downside risk here from both a growth and inflation perspective. So a lot of that interest rate volatility that you’ve seen hurting some of those segments of the market over the last year or two should start to become a little bit more helpful, and it’s a pretty interesting dynamic for total returns.

Fast reading

Commentary: A year to favour the certainty of coupons (over the guesswork of earnings)
Economic outlook: Will 2023 tailwinds become 2024 headwinds?
Credit fundamentals: Opportunities and challenges within credit dispersion
Catalysts: Our downside and upside risks for the year ahead

360°, Q1 2024: Dispersion, disparity, duration

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Archive: Previous editions of 360°

As fixed income markets evolve through the economic cycle, so too does our thinking. For a view on how the investment landscape has changed, read some of our reports from the past year below: