The independent manager specialized in corporate fixed income Muzinich & Co has updated this Thursday its outlook for the coming months for the market in general, monetary policy and this asset class, very fashionable in recent times and a great attractor of flows of capital.
Although it is true that they recognize that fixed income has run a lot in recent months in the heat of the beginning of the rate cuts, they affirm that there are still many opportunities and that “the carry that’s all.” “Investors can still buy very attractive coupons and add a little more profitability due to the price movement towards the pair,” explains Erick Muller, head of product and investment strategy at the company.
The economic context that the manager appreciates is that of a clear slowdown in growth which, for the moment, will not turn into a recession, which represents the main risk for the evolution of fixed income. Regarding inflation, they believe that it continues to be on the right track and that it will reach the objectives set by the central banks.
“These days we are witnessing a reevaluation of expectations regarding interest rates and it is being seen in the differentials of the short part of the curve,” explains the expert. At this moment, the market is pricing in two rate cuts of 25 points by the Fed and a final one of another 25 points by the ECB before the end of the year.
These macro perspectives, however, could be conditioned by external agents such as the elections in the United States. [si gana Trump implicaría un aumento de los aranceles]China’s economic situation [con el efecto sobre el consumo mundial que puede tener su nueva política de estímulo económico] and the situation in the Middle East, the main catalyst for oil and energy prices in the coming months. “A key point is also confidence. We must recover it. Savings are growing and that is a sign that consumer confidence is weakening,” he adds. For Muller, central banks have to send a message of confidence at their last meeting of the year.
Thus, Muller predicts that 2025 will also be a very good year for fixed income even if it does not reach the levels of recent years and, “considering how stock market valuations are, corporate fixed income offers great attractiveness in exchange for risk.” much lower than variable income.” Among the asset classes where you see the best opportunities are high yield and emerging debtwhere coupons remain high in an environment in which the financial health of companies remains good.
“Defaults are not growing even though these insurance companies high yield Now they are emitting at 8, 9 or 10% compared to the 5% they achieved a short time ago. The fixed income investor has returned to this asset and there is a lot of flow entering debt products. Inside the high yield We recommend positioning yourself in the highest quality part,” concludes Muller.
#Muzinich #expects #good #fixed #income #committed #highest #quality #high #yield
