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COVID-19 UPDATE

As the COVID-19 outbreak intensifies and market volatility increases, get our latest insights.

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Featured White Papers

Our Journey to a Sustainable Future

As investors and advisors who focus on our clients' long-term success, sustainability is central to how we assess the risks and opportunities facing our clients. Read More (PDF)

Navigating the Macro Environment

Lotta Moberg, Ph.D., CFA

The current environment opens up a number of opportunities for managers who look at fundamental value, but it also forces navigation. Watch the video or read the recap below. The current environment certainly opens up a lot of opportunities for fundamental value, and it also forces a lot of navigation. Take, for example, emerging markets, […]

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6 Negative Consequences of Low Rates

Brian Singer, CFA, Partner

Rates will likely remain lower for longer, as explained in “Rates: Lower for Longer.” And we are wary of the distortive consequences of low rates, much of which will relate to sluggish growth caused by persistent malinvestment. At the epicenter of this lower-for-longer environment is the transfer of wealth from creditors to debtors—such as sovereign […]

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Part 3: COVID-19 Science and Economics

The Active Share
The Active Share Podcast

In the third installment of our COVID-19 series, our moderator, Hugo Scott-Gall, co-director of research on the Global Equity team, checks back in with our in-house COVID experts, Research Analyst Camilla Oxhamre Cruse, Ph.D., and Global Strategist Olga Bitel, on why cases are rising in some areas and declining in others, where we are on […]

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ESG in EMD: People Drive Performance

Luis Olguin, CFA
Yvette Babb
Yvette Babb and Luis Olguin, CFA

Having lived and breathed in emerging markets has given us an understanding of emerging debt markets and keen insight into how developments are likely to unfold —including environmental, social, and governance (ESG) factors. In this third part of a three-part series, we explain the origins of our passion for the asset class and how we […]

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Rates: Lower for Longer

Brian Singer, CFA, Partner

As we near the end of our “Adventures on the Planet of the Apes” blog series, we are in tumultuous times. We anticipated the next downturn would mark a further step toward loose monetary policy, piloting toward zero or negative interest rates and more asset purchases. It appears as though we have now entered that […]

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Digital Payments Issuers Face Regulatory Risk

Daniel Hill, CFA

Now that we have discussed the role merchant acquirers play in the global payments ecosystem, which offers access to a truly enormous addressable market, we’d like to move on to issuers—the banks that issue credit and debit cards and the issuer processors that are either internal functions within banks or are banks’ external partners. By assuming credit risk, banks […]

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2020 U.S. Election Primer

Ross Hambrick, CFA

With fewer than 100 days until the U.S. presidential election, prediction markets currently give Joe Biden a 60% chance of winning. A Biden win could have implications for policy—including taxes, spending, and healthcare—but only if the Democrats also take control of the Senate.  Polling Data Given that U.S. presidential elections are not really national elections […]

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Positioning for a Weaker Dollar

Daniel Wood
Lewis Jones, CFA, FRM

The U.S. dollar faces downward pressure due to a combination of macro and technical factors, and we believe a key beneficiary of this trend will be investors in sovereign emerging markets debt (EMD) that is denominated in local currencies. Several factors—a rising growth advantage, light market positioning, and attractive valuations in both bonds and foreign […]

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Plant-Based Protein: No Mainstream Penetration

Rita Spitz, CFA, Partner

Plant-based protein is not a fad. But it likely won’t materially change the food landscape, either—in great part because penetration isn’t mainstream. As we explained previously, plant-based protein is a source of nutritional protein derived from plants. This can include pulses, tofu, soya, tempeh, seitan, nuts, seeds, grains, and peas. This includes nondairy milks, such […]

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How We Stop Wasting Food

The Active Share
The Active Share Podcast

Getting surplus food into the mouths of the hungry is more complicated than it seems. Join our moderator, Hugo, and portfolio manager, Simon, for a conversation with Laura Winningham, CEO of City Harvest London, which has rescued 4,000 tons of surplus food and delivered 10 million meals to those in need. Laura’s comments are edited […]

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More Competition for Merchant Acquirers

Daniel Hill, CFA

Merchant acquirers—the initial gatekeepers in a digital transaction—present compelling investment opportunities. They are part of an industry that offers access to a truly enormous addressable market across the world, and varying global penetration creates opportunities for active managers. But they are not without risks. The Gatekeepers Previously, we explained that the global payments ecosystem consists […]

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Developing Leaders in Asset Management

Alaina Anderson, CFA, Partner

As one of the few women of color in portfolio-management roles across the industry, Alaina Anderson knows the importance of being proactive and intentional about developing diverse leaders in asset management. In the Q&A below, she discusses how she moved from a small-cap consumer analyst to a portfolio manager and partner. Why is breaking into […]

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Beyond the Inflation Regime Collapse

Brian Singer, CFA, Partner

At some point, ever-lower rates will fail to stimulate the economy, and the current monetary regime will likely be abandoned when this becomes the prevailing view, as we noted in “The Death of the Inflation Regime.” But what happens then? Collapses of monetary regimes tend to come in tumultuous times. Two world wars ended with […]

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Follow the Money in Digital Payments

Daniel Hill, CFA

Although digital payment transactions take only seconds to complete, there are different layers and numerous players interacting behind the scenes that make that phenomenon possible. To appreciate the investment opportunities in this space, it is important to understand the business models involved and how money flows through the system every time consumers swipe a credit […]

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The Spread Over Sovereign Framework

Luis Olguin, CFA
Mariana Villalba, CFA

As the emerging markets hard currency universe has evolved from an asset class predominantly composed of sovereign debt to a more diversified one including sovereigns, quasi-sovereigns, and corporate debt, opportunities to create better risk-adjusted portfolios using corporate debt have emerged. Adding Corporates to Portfolios: A Systematic, Risk-Managed Approach The hard currency emerging markets debt (EMD) […]

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Sportswear: Sweet Success Amid COVID-19?

Kwesi Smith, CFA

As a discretionary good, sportswear may seem an unlikely winner in the wake of COVID-19. But the category—which includes athletic apparel and footwear—has some unique characteristics that make us think it will emerge just fine. In fact, for stronger companies, we believe COVID-19 will be an accelerant as the companies leverage their connections with consumers […]

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Digital Payments and Aerospace—Diverse Growth Opportunities

Ken McAtamney, Partner

New-economy digital business models proved resilient and defensive amid the pandemic-induced collapse in economic activity, and this widening performance differential is particularly interesting to us as investors in industry-leading growth companies. We are also interested in some of the more compelling structural growth companies in cyclical industries that have been particularly affected by the economic […]

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Outlook for Sovereign Debt Restructurings

Daniel Wood
Jared Lou, CFA

Historically, a combination of high yield and minimal default risk has led emerging markets debt (EMD) investors to enjoy strong returns—but the impact of COVID-19 has called into question the potential for such favorable returns in the future. Historically speaking, however, markets have overestimated the probability of default and underestimated eventual recovery rates. Defaults Priced […]

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Sector Insights in India

Anil Daka, CFA
Bryan Shea

The tailwinds—and headwinds—to development in India are affecting the investment landscape in distinct ways across sectors. The common theme, however, is that as digital connectivity unlocks new sources of growth and as the playing field in India becomes more level from a policy perspective, high-quality companies may have more opportunity to expand their competitive advantages. […]

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The Death of the Inflation Regime

Lotta Moberg, Ph.D., CFA

We can observe a history of different monetary regimes that all eventually died, as we discussed in “Where Is the Inflation?” Does that mean this one is coming to an end? While history suggests the current regime could last another decade or more, we do not believe that it will simply die of “old age.” […]

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Tailwinds (and Headwinds) in India

Daniel Hill, CFA
William Benton, CFA, Partner

India, the world’s second-largest country by population, is home to 1.3 billion people, about half of whom are below age 25, meaning that a huge number of Indians will be entering their prime in terms of productivity and consumption over the coming decade.1 The appealing size of India’s total addressable market (TAM) is undeniable, but […]

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ESG in EMD: Fundamental, Not Fashion

Luis Olguin, CFA
Yvette Babb
Yvette Babb and Luis Olguin, CFA

As environmental, social, and governance (ESG) factors come to the forefront of investing, more and more managers are using them for sovereign and corporate debt analysis—but we developed our ESG framework before ESG became fashionable, so we’re not jumping on the bandwagon. In this second part of a three-part series, we explain how we developed […]

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Plant-Based Protein: More Than a Fad?

Rita Spitz, CFA, Partner

Earlier this year, a major global food and agriculture company announced the launch of private-label plant-based meat products, which will help retail food and foodservice businesses more easily capture a share of the growing plant-based protein market. That said, the company has also invested $7 billion in animal protein over the past five years, which […]

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Where Is the Inflation?

Lotta Moberg, Ph.D., CFA

We will likely see low and even negative rates until the current era of inflation targeting gives way, as we explained in “Why Rates Are Low.” But where is the inflation? When rates were a tool to liquidate government debt in the 1940s and 1950s, inflation was a central banker’s friend. Today, rate cuts are […]

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Disruption and Growth in Digital Payments

Daniel Hill, CFA

The digital payments industry offers access to a truly enormous addressable market across the world, and varying penetration across regions and countries creates opportunities for active managers. But disruption is always a consideration when analyzing an industry, and this threat varies significantly across the segments of the digital payments industry. The global payments ecosystem consists […]

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Active Perspectives on India's Evolution

D.J. Neiman, CFA, Partner

In India 2020: A Vision for the New Millennium, A.P.J. Abdul Kalam and Y.S. Rajan detailed how India could become a developed country and one of the world’s four largest economies by 2020. But how is the India 2020 vision holding up in 2020? With the world’s second-largest population, a democratic government, and a capitalist […]

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Leadership: One GOALLLLLL!

The Active Share
The Active Share Podcast

Strong leadership, especially during uncertain times, is more important than ever.  Join our moderator, Hugo Scott-Gall, co-director of research on the global equity team, for a conversation with Jill Ellis, former head coach of the U.S. Women’s National Soccer Team, on creating a dynamic environment, making sound decisions, and working with diverse personalities. Jill’s comments […]

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Small-Cap Value: Ignored but Not Forgotten

Matthew Neska, CFA

Being a value investor has been challenging over the past 13 years, and there have been echoes of “value is dead” within the marketplace. But history has shown that investors who stick with value during challenging times could be rewarded. The Case for Small-Cap Value Financial research has widely documented that within equities, value investing […]

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COVID-19 Drives ESG Demand

Blake Pontius, CFA

Investor demand for environmental, social, and governance (ESG) integration has increased rapidly across regions and asset classes in recent years and is now poised to accelerate in the wake of COVID-19. To help frame the ESG outlook from here, it is important to consider which factors contributed to greater investor adoption of sustainability objectives before […]

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10 Things the Pandemic Could Change

Ken McAtamney, Partner

Many of the long-term structural changes to the U.S. economy resulting from COVID-19 will depend on the post-pandemic assessments that are made by policymakers and the political reception of their actions. This process really has not yet begun to play out, but in the meantime, we have begun thinking about the ways the world—and investment […]

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Why Rates Are Low

Brian Singer, CFA, Partner

As a follow-up to our previous post in this series, “Nothing Natural About Low Rates,” we see good reason to believe that the explanation for the current low real-rate environment lies in the incentives that govern the prevailing monetary regime. Starting in the era of the “Greenspan put,” central banks in developed countries have been […]

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5 Factors Driving Digital Payments Growth

Daniel Hill, CFA

While we sometimes find compelling investment opportunities in obscure corners of the market, we also discover them by looking closely at something that is an integral part of our everyday lives. Such is the case with the global digital payments industry, the multifaceted and complex financial transaction ecosystem that allows individuals around the world to […]

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Accelerating Secular Shifts Are Reshaping Industries

Jim Golan, CFA, Partner

The COVID-19 pandemic is disrupting the lives of people around the globe and changing consumer behavior in real time. While the long-lasting impacts of this pandemic are yet to be seen, we believe the virus is rapidly accelerating several big-picture secular shifts within certain industries that have been developing for years. The Rise of E-Commerce […]

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Paths to Recovery

Olga Bitel, Partner

In determining where the current economic slowdown is likely to end up, it helps to consider the potential paths to recovery. Will the recovery be V-, W-, U-, or L-shaped? We will talk about why we are modeling the recovery the way we are, where the potential pitfalls are, and what the different bull/bear scenarios […]

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Attractive EMD Entry Point After COVID-19 Shock

Marcelo Assalin, CFA

The COVID-19 shock to the global economy has sent emerging markets debt (EMD) spreads to levels not seen since the global financial crisis. We believe this rise in EMD’s risk premium is overdone and underappreciates the fundamentals of the asset class, creating potential opportunities and an attractive entry point. A Technical Sell-Off Emerging market (EM) […]

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