- Macro Economic Perspectives
- Interest Rates & Fixed Income Opportunities
- Liability Driven Investing
Fixed Income Opportunities
- The Art and Science of CLO Analysis
- Emerging Markets Debt With the Fed in Play
- Reinventing the Front End
- Adjusting to a World of Surplus Crude
- Portable Alpha 2.0
- Back to the Futures
- Why Global Loans?
- A Closer Look At Calls
- Emerging Markets Debt Under the Covers
- Option Modeling for Leveraged Finance Part I
- Questions and Answers About Senior Secured Loans
- Absolute Return Fixed Income Strategies: What, How, and Why Now?
- Managing Corporate Bond Event Risk
- A Puzzle in Portuguese
- The Low Ranger
- Measuring and Managing Emerging Markets Fixed Income Risk
- Focus on Local Market Opportunities
- Emerging Markets Corporate Debt: Opportunities in a Large and Maturing Asset Class
- What Went Up, Came Down
- Economic Recovery: No Death Knell for Bonds
- Economic Recovery Creates Opportunities in Bonds
John Di Paolo, CFA, FSA, Principal, Structured Product Research Team, Brian Juliano, Principal, Portfolio Manager, Leveraged Finance Team and Edwin Wilches, CFA, Vice President, Portfolio Manager, Leveraged Finance Team, Prudential Fixed Income, September 2015
As a nuanced asset class, successful CLO investing requires strength in both quantitative structured credit and traditional corporate credit analysis—two disparate competencies not typically found in most investors. CLO tranche analysis, therefore, comprises a blend of art and science. This paper describes both the qualitative and quantitative steps that shape Prudential Fixed Income’s investment process for CLO tranches.
Matthew Duda,Portfolio Specialist, Emerging Markets Debt, Prudential Fixed Income, September 2015
There are still many unknowns surrounding the timing and magnitude of the next U.S. Federal Reserve rate hiking cycle and its potential impact on emerging markets (EM) debt. In this paper, Matthew Duda, Portfolio Specialist, discusses why he believes the emerging markets debt markets are prepared for a Fed liftoff and could perform relatively well amid a hiking cycle.
Joseph D'Angelo,Managing Director, Head of Money Markets, Prudential Fixed Income, July 2015
Multiple shocks are set to descend on the front end of the fixed income market over the course of the next 18 months. The uncertainty of the aftermath poses a multi-trillion dollar question for a predominantly stable sector, the financial crisis notwithstanding. In this paper, we present an outcome that could dramatically alter the deployment of capital in the front end and create a brand new world for investors to navigate just as the Federal Reserve appears poised to lift short-term interest rates.
Brian Barnhurst, CFA, Principal, High Yield Credit Analyst and David Winans, Principal, Investment Grade Corporate Bond Analyst, Prudential Fixed Income, May 2015
The arrival and subsequent exploitation of U.S. shale has disrupted oil market equilibrium, ushering in a period of global oil abundance. With this, the unique production characteristics of shale, most notably the shorter-cycle nature of shale output and continued improvement in drilling productivity, have profound implications for global oil markets.
Eric Schiller, CFA, Principal and Senior Portfolio Manager, Prudential Fixed Income, June 2014
Despite an environment of low volatility and strong returns, many active equity managers still struggle to outperform their benchmarks over the long term. It is a phenomenon that underscores the attraction for portable alpha as a concept, particularly its potential for uncorrelated performance and long-term alpha generation.
Michael Collins, Managing Director and Senior Investment Officer, Prudential Fixed Income, June 2014
U.S. Treasury futures are tools that can be used by portfolio managers to help manage interest rate and yield curve risk and to facilitate relative value trading. When used properly within a risk-controlled framework, futures can offer greater relative value, cost efficiency, and more efficient execution than physical securities.
Jonathan Butler, Managing Director and Head of European Leveraged Finance, Prudential Fixed Income, March 2014
In this thought paper, Jonathan Butler explains the variations that exist throughout the global loan market and how they may provide relative stability and more, particularly for investors wary of interest rate volatility.
Paul Appleby, CFA Managing Director and Head of Leveraged Finance Group, Prudential Fixed Income, January 2014
This paper discusses how an enhanced option model can improve relative value analysis within the leveraged finance markets. In this second paper of a two part series, portfolio manager Paul Appleby discusses why the model has become more relevant in the current environment.
Arvind Rajan, Managing Director and International Chief Investment Officer, Prudential Fixed Income, September 2013
Emerging Markets Debt continues to be the subject of a binary debate with Bulls pointing to the sector's enhanced resiliency following the secular strengthening in credit fundamentals, and Bears focused on the 2013 volatility that rattled the emerging markets. In this white paper, written in a Q&A format, we raise several global themes and draw their implications for EM Debt.
Bjorn Flesaker, Managing Director and Head of Quantitative Research, Prudential Fixed Income, September 2013
Although high yield bonds and bank loans can provide attractive yields, one must properly account for the additional credit risk borne by the investor. This task becomes even more complex when the bond or bank loan is callable. This paper is the first of a two-part series that looks at the model we developed to appropriately value these securities.
Joe Lemanowicz, Managing Director and Head of U.S. Senior Secured Loan Team, Prudential Fixed Income, August 2013
U.S. senior secured loans ('senior loans') continue to receive a lot of attention from investors seeking higher yields and protection against rising interest rates. The following Q&A is designed to answer some of the questions we have been receiving from investors regarding the asset class.
Robert Tipp, Chief Investment Strategist, Prudential Fixed Income, and Michael J. Collins, Senior Investment Officer and Credit Strategist, Prudential Fixed Income, June 2013
Robert Tipp, Chief Investment Strategist, and Michael Collins, Senior Investment Officer and Portfolio Manager, discuss how a well-diversified, duration-constrained absolute return portfolio can take advantage of the alpha opportunities available in today's market environment while avoiding exposure to rising interest rates.
Temple Houston, Head of Investment Grade Corporate Bond Research, Prudential Fixed Income, April 2013
A look at the economic and market factors driving the recent rise in adverse event risk in the US industrial corporate bond sector, and a review of the steps that fixed income investors can take to manage the potential negative impact to their bond portfolios.
Arvind Rajan, Managing Director and International Chief Investment Officer, Prudential Fixed Income, April 2013
From 1900 to 1980 Brazil was one of the world's fastest growing economies, but for roughly the past three decades the country has had to overcome a string of crises to arrive at its present state—a tantalizing mix of opportunity and challenges.
Robert Tipp, Chief Investment Strategist, Prudential Fixed Income, September 2013
This paper, authored by Robert Tipp, is entitled The Low Ranger. The paper takes a long term perspective, considering historical trends and the current economic backdrop, in forecasting our outlook for interest rates and the investment implications for fixed income.
Arvind Rajan, Managing Director and International Chief Investment Officer, and
Martin Lawlor, Managing Director and Head of Risk Management for Prudential Fixed Income, September 2012
The emerging markets debt asset class has historically undergone many crises, and understanding its underlying risks is essential for any investor in hard currency sovereign and local market debt.
Cathy Hepworth, Portfolio Manager & Sovereign Strategist, Prudential Fixed Income, March 2012
Global growth and investment themes have driven capital flows into EM causing yields to converge toward those of developed, shifting EM local markets from volatile investments to long-term opportunities.
Nick Ivanov, Senior Credit Research Analyst, Prudential Fixed Income, February 2011
Emerging markets corporate bonds represent a growing and opportunistic segment of the overall emerging markets debt universe. This paper takes a look at the evolution and characteristics of emerging markets corporate bonds and how they can add value to investors’ portfolios, either as a dedicated allocation or tactically in emerging markets debt, core plus, and other portfolios with credit exposure.
Robert Tipp, Chief Investment Strategist, Prudential Fixed Income, August 2011
The last few years of low interest rates have been like an exclamation point at the end of a three-decade bull market. So what should we expect to happen next? Many market analysts and pundits anticipate that rates will eventually move back to a higher range, especially given continued fiscal laxity. However, based on historical factors and events, we conclude that the wait for much higher interest rates might prove futile.
Robert Tipp, Chief Investment Strategist, Prudential Fixed Income, October 2009
It's all but official. Global economic recovery is now underway. Improvements in leading indicators have finally translated into economic growth, helped by a deluge of policy stimulus. Consumers responded enthusiastically to the Government's cash-for-clunkers program, manufacturing has picked up from rock-bottom levels, and even the housing market, the the lightning rod for the recession, has improved.
Robert Tipp, Chief Investment Strategist, Prudential Fixed Income, December 2003
While conventional wisdom would suggest that the US economic recovery will put steady upward pressure on interest rates, this time may be different. Unlike the economic recoveries of the 1980s and 1990s, a host of factors in place today should keep long-term interest rates lower during this recovery than during most of the past thirty years. As a result, plan sponsors may continue to reap both solid returns and diversification benefits from their fixed income allocations.