Voya Investment Management Mulit-Asset Strategies Chief Investment Officer Paul Zemsky joined Bloomberg Daybreak Asia “to discuss the latest on the markets.” When asked if the upcoming presidential election “represents the greatest near-term risk to markets,” Zemksy said, “Near-term risk? Yes. The election and handicapping who’s going to win is going to cause volatility ... The underlying fundamentals, in the U.S. particularly, are pretty strong, so I remain pretty bullish and I’m going to stay overweight [on] equities through the election.” Bloomberg’s Stephen Engle also asked Zemsky, “Where in the equity space would you play?” In response, Zemsky said, “I think the U.S. is still a very strong place to be in the developed world,” with U.S. small and large cap stocks “both going to do very well relative to bonds over the next few worlds, and relative compared to the rest of the developed world.”
Voya’s Buziak Confirms Block-Focused Trading Saw An Increase As Asset Managers Reacted To Volatility
Traders Magazine reports, “They might not be all that new, but conditional orders have really come into their own in this year’s unusual trading conditions, helping to make 2020 a bumper year for block-trading venues.” Voya Investment Management Head of Trading Nanette Buziak “confirms an increase in block trading earlier this year as asset managers responded to the volatility.” Buziak said, “When the NYSE closed the floor, there was a particular increase in activity on the block-focused venues around the market close, because buy-side firms no longer had access to the NYSE closing auction via the D-quote.” She added, “Conditional orders definitely make it easier to find the other side of the trade.”
CNBC reports on its website that Voya Investment Management Head of Asset Allocation Barbara Reinhard appeared on the network’s program “Squawk Box” along with Cornerstone Macro Policy Head Of The Market Research Team Donald Schneider “to discuss the potential impact of various election outcomes on the markets.” During the appearance, Reinhard said any losses that occur as a result of Biden’s tax plan going into effect, should he win, “would be more than offset by the stimulus program and the funding that he is going to” spend “to fight the coronavirus.” She added, “I do think” that a Biden victory “over the longer term, it’s probably going to be close to a wash over ... the next four-year period. But I think the economy is in desperate need right now of an extra stimulus plan and I think, also, a comprehensive plan to combat coronavirus.” Reinhard also said that the markets typically experience instability if an incumbent loses a reelection bid, but typically recover four to six weeks after the victor’s inauguration.
Kiplinger “identified 15 bond funds in four key categories” to build a properly “diversified bond portfolio” with “a range of holdings” depending on an investor’s goals, time horizon, and needs. Voya Multi-Asset Strategies and Solutions Chief Investment Officer Paul Zemsky is quoted in one of Kiplinger’s choices for bonds that generate income, the Fidelity Corporate Bond. He said, “Yield is relative.” Zemsky’s statement is placed after Kiplinger said that bond purchasers should “lean on high-quality, investment-grade corporate bonds – those rated between triple-A and triple-B – which currently yield 1.40% to 2.29%. That sounds low, but it’s better than what you’ll earn on cash, which is nothing.” Zemsky is also quoted in another Kiplinger choice for bonds that generate income, the Vanguard High Yield Corporate. According to Kiplinger, “High-yield debt, in small doses, can spice up your income exposure.” Zemsky advised those looking at high yield corporate bonds to “be selective.” Zemsky said, “A high-yield index fund is not a good idea ... Buy one that’s run by a seasoned manager who is skilled at picking good credit.”
MarketWatch reports that airlines are starting to use frequent flyer programs as “collateral for bondholders.” Airlines are making the pledges against their programs because they can generate cash by selling frequent flyer miles to credit card issuers, who, in turn “offer them as part of their reward programs to their customers.” The article says that “the revenues earned from selling the miles” to credit card issuers “are much higher than the cost of any flight travel redeemed by passengers.” Voya Investment Management Fixed Income Portfolio Manager Cliff Andrus said, “The customer doesn’t realize the margins are quite high.” According to the article, “Even with reduced demand for air travel, the mileage programs still hold their value.” Andrus said, “You’re going out to spend money on your credit card, whether or not you’re flying.” According to some analysts, using frequent flier programs as collateral “represents a desperate move by airlines that are looking for any assets that they can pledge.”
Voya Investment Management LDI Strategist and Senior Actuary Oleg Gershkovich discusses “the challenges and opportunities that pension fund managers are facing today” in a video interview posted on the website of Pensions & Investments. During the interview, Gershkovich said that “the biggest challenge” to pension management in the next year “is resisting the temptation to rerisk in the pension plan.” Even though “we are seeing valuations at an all time high,” Gershkovich says that “plan sponsors need to exhibit a lot of caution before they decide to rerisk into their pension plans.”
Voya Investment Management Managing Director and Insurance Solutions Group Head John Simone, in a piece for Insurance Investor wrote, "Although private placements and commercial mortgage loans have long been 'core' allocations for life insurance companies, we are seeing demand from non-life insurance companies picking up significantly." According to Simone, "the hunt for high-quality yield due to historically low and lower rates is here to stay given the pandemic and the resulting central bank actions globally to keep rates low and apply a plethora of liquidity tools to ensure markets are functioning normally (i.e., TALF, buying publically traded corporate debt to name a few)." Simone added, "For selective investors, the market has provided attractive spreads to similar rated public corporate bonds and the quality of the deal flow, as measured by rating, has increased. This combination offers investors an attractive combination of increased spread with higher average credit quality."
Yahoo! Finance reports that the U.S. Department of Labor’s “proposed rule tightening requirements for socially-conscious investments in 401(k)s or other employer-sponsored plans shouldn’t be implemented, according to one expert.” Voya Investment Management CEO Christine Hurtsellers, in a recent segment on Yahoo’s The Final Round program, said, “When we surveyed our clients, 76% want their employer to consider ESG” principles in the 401(k) plans they offer. During her appearance on The Final Round, Hurtsellers also said, “When you think about ESG investments, as well, they’ve performed very well.” She added, “They’ve been in Europe for literally tens of years, and we have over ten years of data on how these assets or these investments have performed when you think about ESG.” According to Hurtsellers, “If you have a quality ESG find...it does outperform the broader market.”
Markets Media reports, “Tony Campos, director of ESG Americas at FTSE Russell, said in a blog that the index and data provider’s 2020 survey found that 63% of asset owners in North America said that they were either implementing or considering ESG, up from 39% in the last two years.” The surge of interest “in sustainable investment comes as the” U.S. “Department of Labor (DOL) has proposed preventing Employee Retirement Income Security Act (ERISA) plan fiduciaries from investing in ESG vehicles unless they represented ‘economic risks or opportunities that a qualified investment professional would treat as material economic considerations under accepted investment theories.’” In July, “Voya Financial ... submitted a comment letter to DOL expressing concerns that the proposal ignores the needs of retirement plan savers and would likely make it more difficult for plan sponsors to consider ESG factors in their evaluation of plan investment options.” Voya Investment Management CEO Christine Hurtsellers, in a statement, said, “Contrary to the DOL’s assertion, recent experience has shown that ESG investments can outperform broader markets, particularly in times of market stress. If adopted as proposed, we believe the proposal would have a chilling and negative impact on ESG investment activities that would otherwise benefit retirement plan savers.”
Pensions & Investments reports Voya spokesperson Kristopher Kagel confirmed that Voya Investment Management Managing Director and Head of Product Management and Development Bill Golden assumed Stephen Dougherty’s responsibilities as a managing director and head of structured assets and alternatives. Pensions & Investments mentions that “Dougherty was named global head of product at Aegon Asset Management.”