Bloomberg reported “as the Federal Reserve moves closer to expanding the money supply, corporate bond investors are snatching up notes and taking more risk – but not too much more.” Bloomberg said “prices on the lowest-rated investment-grade bonds are jumping, as are the highest-rated junk bonds. While high-yield investors are still favoring relatively safer securities, those that invest in high-grade are reaching for yield in the riskiest part of that market.” Travis King, head of Investment-Grade Credit at Voya Investment Management, said: “It’s been all buyers.
Voya Investment Management Managing Director and Head of Insurance Solutions John Simone was quoted throughout an A.M. Best article looking at how large asset managers and insurers are planning for a riskier future as the warning signs of an impending recession mount.
Pensions & Investments reports institutional asset owners such as insurance companies “continue to seek new sources of alpha in alternative investments.” As yields on core fixed income assets have fallen in recent years as interest rates decline, insurers have turned to real estate, hedge funds, and other alternative classes, though those teams are often outside the company’s traditional core of expertise.
Voya Investment Management Head of Asset Allocation Barbara Reinhard was on CNBC discussing the recently-released Federal Reserve Open Market Committee meeting minutes. According to Reinhard, there is little threat of inflation despite a patient Fed. She said, “[I]t’s an accomodative turn from last year, and there’s a high hurdle for the Fed to cut interest rates at this point. That’s why the market has been pricing in a Fed cut at this point – about 40 basis points ...
Voya Financial’s Dave Goodson and Mohamed Basma write in Financial Advisor Magazine that collateralized loan obligations (CLOs) have been “cast as the villain most likely to bring the global economic system to its knees” in the next economic downturn, though Goodson and Basma argue that a better gauge of risk requires “a deep understanding of the different instruments used to gain corporate credit exposure.”
Bloomberg reports hedge funds and asset managers “are resurrecting collateralized debt obligations (CDOs) that bundle risky bonds and loans into new, higher-rated securities.” Even though the assets “blew up during the financial crisis,” proponents argue that improved quality of underlying debt means CDOs should be well placed to weather the next economic downturn and drive profits in a down market.
International Financing Review reports “single-asset and single-borrower CMBS deals are accounting for a high proportion of activity in the market, as conduit refinancing slows and lenders face competition for assets.” Investors note that they often prefer single asset over multi-borrower deals due to their simplicity, making them easier to underwrite. Voya Investment Management Head of Securitized Credit Dave Goodson said, “Single-asset deals are so much easier to underwrite – it’s one borrower, or one property, and it’s so much easier to get your head around that.
The International Financing Review quotes Dave Goodson, head of securitized credit at Voya Investment Management, saying, “The street was pretty light on their inventories going into the quarter, so (dealers) have room to absorb risk.” Goodson added, “What we’ve seen so far this quarter tells us there’s a lot of money everywhere – secondary markets are almost as lively as primary.”
Financial Planning reports Money Management Executive has announced the winners of its 2019 Top Women in Asset Management Awards, with Voya Investment Management Head of Product and Marketing Strategy Dina Santoro named to the list. Additional details and full profile of the winners are expected in the magazine’s May edition.
Voya Investment Management Head of Asset Allocation Barbara Reinhard was recently on Bloomberg discussing market volatility, China, and last week’s late-stage rally. Looking at the recent stock market recovery from December lows, Reinhard said Voya believes markets are overbought. She said that “to have had the significant rally that we’ve seen in U.S. equities, which are up 18 percent from recent lows...it’s not unusual to see these types of pullbacks.”