News Hub: Knowledge multiplies when shared

Crisis-proof investment strategies are once again in high demand in uncertain times. Investors are looking for attractive returns with low risk.

The US Federal Reserve has made clear announcements about monetary policy in 2022. What does the market expect from the Fed and what impact do the capital markets think this policy will have? An analysis of the market at the end of 2021. 

Excessive liquidity, asset prices at all-time highs and inflation rates of more than five percent: even though the challenges for investors in 2022 are great, returns can still be achieved on the international capital markets with a skilful asset allocation.

The “Promoting Women Export Entrepreneurs” programme seeks to build an ecosystem of women entrepreneurs and supporting them in their access to export markets. 

In this interview, Desislava Vladimirova gives us an insight into her path from working student to permanent doctoral candidate at Quoniam and tells us what makes working in research so exciting.

Factor investing is becoming increasingly popular in the corporate bond market. Academic and practitioner evidence demonstrates that well-known equity factors can be redefined to capture excess returns in global corporate bond portfolios.

This is how the SRI team works for the success of your sustainable investments.

By joining the Net Zero Asset Managers Initiative, we commit that our portfolios will be carbon neutral by 2050 or earlier.

Our CEO Nigel Cresswell introduces himself and sets out his plans for Quoniam.

Have you been wondering how artificial intelligence can add value in portfolio management? The simplified answer is that it can reveal relationships that are not immediately obvious and provide clues to the most relevant data sets and variables.

Setting up efficient research in the cloud, migrating tens of thousands of lines of code to Python – and doing it all largely from home? Our research team has made it possible. An interview with Dr Volker Flögel, Head of Research, and Andre Fröhlich, Head of Research Technology.

To ensure the success of your investments, we continuously research the further development of our alpha factors.

Diversity unites and is crucial for creative and successful collaboration.

Contrary to the expectations of many market participants, US interest rates fell markedly since the end of Q1/2021 despite macro data in the US pointing in the opposite direction. Market participants discussed several reasons for this move on which we shed a light in this article.

Less risky stocks often achieve higher risk-adjusted returns – a phenomenon called the low-risk anomaly. But is this theory still valid today and what role does it play in the current market environment?

In recent years, researchers have explored sentiment from various media and its usefulness in predicting financial markets. However, macroeconomic forecasting has not yet been a focus. We show how forecasts of industrial production and consumer prices can be improved by applying a new method to incorporate emotions from newspaper articles.

As the economy recovers, voices are getting louder to withdraw monetary policy support. Does this pose a threat of further interest rate hikes? The past years show that US interest rates have risen in phases of bond purchases, but fell when purchasing programmes or the Fed balance sheet were reduced. There is  therefore no indication that a reduction in bond purchases must be negative for bond prices.

Just over a year has passed since the outbreak of the COVID-19 pandemic. While Europe is still in lockdown in many places, the global stock markets have long since reached new highs. Governments and central banks continue to print money on a grand scale, asset prices are rising to record levels and the danger of inflation is increasing. How are equities doing in this environment?

Our new investment strategy offers institutional investors participation in the global equity markets with a focus on companies that make an above-average contribution to achieving at least one of the 17 UN Sustainable Development Goals (SDGs).

For 2021, with interest rates at record lows and tightened spreads, investors are wondering where to turn in order to generate returns in the liquid fixed income universe. We will show that US credit investments offer attractive returns even after currency hedging. Due to a steep US yield curve, the expected return is higher than the current yield.

The variety and quantity of ESG data are increasing rapidly. In this ‘insights’, our ESG experts answer eight important questions on how ESG data has evolved, what challenges institutional investors face and how a quantitative investment approach can give them transparent solutions.

Several challenges make fully systematic fixed income investing different than equity. Below we share what the common challenges* are and how we address them at Quoniam.

Successful patents create a competitive advantage and added value for enterprises. The challenge in portfolio management is to determine the value of such innovations, and to apply this to single-issue share selection. Strategies that buy companies with high patent values and sell those with low patent values generate annual excess returns above 4%.

The use of unstructured data has become increasingly popular over recent years as “traditional” data such as financial ratios or announcements reflects financial markets events, particularly crises, with a time lag. This year’s COVID-19 outbreak is an example that illustrates how sentiment measures derived from newspaper narrative capture these dynamics and generate positive returns.

Comparing the relative performance of Value and Growth stocks, we can see that the gap has widened considerably in recent years – and particularly in the recent past. In phases of recovery or when valuation bubbles burst, Value stocks generate strong outperformance, while cyclical stocks are at risk amid the ongoing slowdown of the real economy.

Across Europe, measures implemented to contain the COVID-19 pandemic are being gradually lifted. Infection rates are decreasing. At the same time, the capital markets are recovering. Thus, we are currently at the crossroads between crisis and recovery. Which is the smarter strategy in such an environment: Growth or Value?

In order to further develop our alpha forecast model we analyse factors that are both expected to show an outperformance and are not correlated to the information previously used. With the information of the short-selling market we have found such a factor and included it in our forecast model.

There is increasing academic and practitioner evidence that well-known equity factors can be used to capture excess returns in global corporate bond portfolios. In this paper we discuss the implications for an asset owner using multiple managers with different alpha sources and styles. We analyse the exposure to the Value, Quality and Momentum factors for three leading fundamentally-managed investment grade credit funds in comparison to the Multi-Factor portfolio of Quoniam.