European investors hoarded cash in May. As Brexit-induced uncertainty dominated markets, they poured a net €14bn into USD money market funds, according to Lipper fund flows data.
Tag: Tim Peeters
The ECB’s corporate bond buying – a double-edged sword
The decision by the ECB to include investment-grade corporate bonds in its asset purchasing programme has led to a spike in issuance and to yields edging even lower. While this market response was anticipated by the central bank, its stimulus efforts threaten the viability of the asset class in the longer term .
Has the tide finally turned for inflation-linked bonds?
With the eurozone currently experiencing deflation, inflation-linked bonds are probably not the first thing on the mind of investors. However, as Brent crude is now back at $48, the only way for inflation is probably up. So should investors start thinking about protecting their portfolios against price rises?
The commodity bull awakens
Although commodities are still being treated with a great deal of suspicion, by taking a long-term view investors could reap the rewards of the consolidation that is already underway in the sector.
Belgian fund buyers lose their optimism
Not so long ago, Belgian fund selectors were more optimistic about the macroeconomic outlook than any of their peers in Europe. Even more recently, they were Europe’s biggest buyers of both European and US equities. But times have changed.
Dollar cash outperforms MSCI World year-to-date
If you had invested all your cash in dollars as a euro-based investor this year, you would have earned a better return than if you had emulated the MSCI World. Moreover, equity returns seem to have become completely tied to exchange rate movements.
Is cash king?
With volatile market
conditions prevailing, many
investors are turning to cash
as a risk-reducing measure.
But are they really doing
themselves a favour?
Investors hoard cash amid market uncertainty
Investors around the world are increasing their cash holdings as the economic slowdown in China threatens to drag the world economy down. According to data from Lipper published today, investors poured in a net $77.7bn (€70.5bn) into money market funds in July. This is more than half the total amount flowing into cash funds in the previous nine months.
The bumpy bond road
Benchmark 10-year bond yields in the Eurozone have more than doubled since the end of April, when they reached an all-time low. Are we now simply witnessing a correction after markets overshot in the wake of the ECB’s bond-buying programme, or is this the beginning of a serious bond bear market as deflation worries have started to fade?
Currency hedge or bet
At our Pan-European Congress in Rome last month, we asked delegates how they deal with the volatility of currency markets. Do they hedge or do they take active currency bets?
