Talking Heads

Value investing remains a worthwhile approach, even after an extended period of underperformance. A rebound has now set in that looks sustainable. Rising interest rates should be supportive of the value style and value still looks cheap relative to growth. Hosted by Ausha. See ausha.co/privacy-policy for more information.

Foreign exchange (FX) markets can be viewed as a derivative asset in that they tend to be driven by volatility in other asset markets. Since 2015, most of the leading currencies have traded in relatively confined ranges. With volatility rising in equity, bond and commodity markets, there are good reasons to expect a new regime in currency markets.  Hosted by Ausha. See ausha.co/privacy-policy for more information.

Inflation has bounced back vigorously from its pandemic-era lows: The headline rate for the US consumer price index has reached a 40-year high, while in the eurozone, the headline rate for the harmonised index of consumer prices is at its highest in 20 years. What does this mean for investors? Hosted by Ausha. See ausha.co/privacy-policy for more information.

To help multi-asset portfolios cope with the geopolitical shock of Russia’s invasion of Ukraine, a move into cash can be useful. At BNP Paribas Asset Management, we have implemented such an approach to ride the recent market volatility and use bounces to sell assets whose fortunes have now changed and build or expand other, more defensive positions at attractive prices. Hosted by Ausha. See ausha.co/privacy-policy for more information.

Global bond markets already faced challenging times before the conflict in Ukraine, but they at least had a clear expectation to work with: the prospect of firm central bank action to tackle rising inflation. Geopolitical developments have upended the calculus, undermining inflation and growth forecasts and weakening the fundamentals across the board for the foreseeable future. Hosted by Ausha. See ausha.co/privacy-policy for more information.

Global markets have seen wide swings as concerns over tighter supplies and crimped trade in the wake of Russia’s invasion of Ukraine caused investors to head for safe havens away from risk assets. However, Guy Davies, chief investment officer for fundamental active equities, advises against impulsive action and argues for a focus on cash flows when picking promising stocks.  For more insights, visit Investors’ Corner at https://investors-corner.bnpparibas-am.com/. Hosted by Ausha. See ausha.co/privacy-policy for more information.

Heightened market volatility and uncertainty over the pace at which the ECB will unwind its bond purchases are the main tests investors in European corporate bonds have to contend with currently. Mitigating factors such as robust earnings, strong cash positions and low defaults could be negated by concerns the central bank might need to take tougher action to contain inflation. Hosted by Ausha. See ausha.co/privacy-policy for more information.

Investing in water-related stocks means tapping into a multi-decade opportunity for growth and innovation. Demand in this segment stretches across the breadth of the economy – from tackling ageing water infrastructure to ensuring healthy drinking water and efficient waste water treatment. Hosted by Ausha. See ausha.co/privacy-policy for more information.

Chinese equities look well set to confront the challenges that Omicron, stricter regulation and moderating growth will bring. Revised earnings expectations and valuations mean their  second-half prospects are brighter. Looser fiscal and monetary policies have the potential to provide a further uplift for sentiment. Hosted by Ausha. See ausha.co/privacy-policy for more information.

In a contrarian call, our emerging market debt team sees appealing opportunities in EM bonds. Specifically in those markets where inflation is likely to peak ahead of developed markets in which investors are having to adjust to the prospect of higher real yields. EM segments that were oversold late last year also represent areas worth investor attention as a recovery takes hold. Hosted by Ausha. See ausha.co/privacy-policy for more information.