MarketWatch reports that even though most analysts believe “high-quality bonds should hold up better than stocks” in an inflationary environment, “that hasn’t been the case lately for debt issued by many Fortune 500 companies.” The sector has registered a -10% total return so far this year, one of its worst since the financial crisis, though sentiment may be changing. Voya Investment Management head of investment-grade credit Travis King said, “I think individual investors are still licking their wounds, given the negative total returns. But we think with around 4% yields it starts to look like a better entry point, particularly if there is stability in the Treasury market.”
CEO Magazine (AUS) reports on how companies are leading “the energy transformation that’s currently taking place by investing in green energy initiatives” as they work to transition to a low-carbon world. Voya Investment Management “has put aside $300 million for renewable energy projects,” with more than half devoted to “supporting wind and solar power initiatives, while the remaining half will be directed toward sustainable infrastructure such as battery storage.” Voya Investment Management Co-Head of Direct Infrastructure Edward Levin said of the company’s approach, “We are thrilled to bring our expertise in renewable energy project financing to deliver our clients access to this growing asset class.”
Bloomberg reports that “a deep divide is opening up as investors focus their hopes on commodity exporters in the Middle East and Latin America” as they try to predict how reverberations of Russia’s invasion of Ukraine will play out in commodities markets. A major concern for investors and policymakers alike is how to keep inflation in check, especially as food prices rise quickly. Voya Investment Management Head of Emerging Markets Fixed Income Jean-Dominique Butikofer said of the market outlook, “Rising inflation, and more particularly food inflation, are giving emerging-market ministers of finance and central bankers growing headaches,” with commodity importers likely to see their budgets constrained if they are forced to subsidize food prices.
Bloomberg reports on the impact for developing markets of the rapid rise in inflation and war in Ukraine following the worst quarter for emerging-market dollar bonds in 24 years. The article notes that the rise in inflation and increasingly large potential rate hikes being considered by the Fed are drawing investors to commodity exporters in the Middle East and Latin America, and that this will likely make it more difficult for lower-income and commodity-importing nations to borrow as costs increase. The war in Ukraine has also made lenders more risk-averse, which is also likely to put pressure on borrowers. Goldman Sachs’s Andrew Tilton and Kamakshya Trivedi explained “The economic costs of Russia’s invasion of Ukraine and the resulting sanctions are likely to be both significant and highly asymmetric,” while Jean-Dominique Butikofer, Head of emerging markets fixed income at Voya Investment Management said “Rising inflation, and more particularly food inflation, are giving emerging-market ministers of finance and central bankers growing headaches.” He also “warned that the need to subsidize food prices will hit the budgets of commodity importers, especially as the risk of social unrest grows alongside households seeing their purchasing power diminish.”
IBS Intelligence reports Voya Investment Management “recently announced that it has partnered with iCapital, a leading global FinTech platform driving access and efficiency in alternative investing for the asset and wealth management industries.” Voya “will leverage iCapital’s customized technology, service and diligence solution for financial advisors and their high-net-worth clients seeking access to Voya’s alternative and private fund offerings, starting with Pomona Investment Fund.” Pomona Capital CEO Michael Granoff said of the new partnership, “As investors look to diversify their portfolios, providing access to PIF via a streamlined and efficient solution makes it easier to invest in private equity, leading to an improved experience for everyone involved in the investment process.”
Voya Senior Portfolio Manager and Head of Asset Allocation Barbara Reinhard was on Bloomberg TV discussing how markets have responded to geopolitical uncertainty, the decline in COVID cases and rising inflation levels. Looking at the likelihood of a strong Federal Reserve response to rising inflation levels, Reinhard said, “I don’t think you are necessarily going to get a monetary policy response. The Federal Reserve has a price stability mandate. They have very high consumer prices at this time, but I think the real channel for the Fed to be watching is going to be through the wage channel. If wages settle back down and you get crude back down, that would be a relatively very good scenario.”
Voya CIO for Fixed Income Matt Toms was recently on Bloomberg discussing the fixed income sector, specifically the “impact of geopolitical tensions, inflation, and a preview of next week’s FOMC meeting.” Toms’ segment begins near the 48-minute mark, where he notes that an economic slowdown “absolutely changes the investment landscape. You really have a tug of war between the upside to inflationary pressure that has gotten so much attention over the last six to eight months and downside pressure – not just from the long-term disinflationary influences that seem to be abating, but from the growth standpoint. There is certainly a stagflationary impulse, and what this means for fixed income is that there’s a downside risk tail we need to be aware of from a credit risk standpoint.”
Bloomberg reports on the market impact of Russia’s military invasion of Ukraine on Thursday, which resulted in increased volatility in global bond markets. Voya Investment Management Chief Investment Officer Matt Toms believes that “the escalated uncertainty in Ukraine, and the spike in commodity prices, moderates the outlook for global growth and therefore increases the risk for corporate credit.” The heightened risk means new bond sales will likely shut down for the remainder of the week, according to people familiar with the matter.
Appearing on Bloomberg, Voya IM’s Senior Portfolio Manager and head of Asset Allocation discussed the markets’ response to the January Labor Report and the latest announcements from the Federal Reserve.
FundFire highlights several recent promotions made by Voya IM, including: Dina Santoro becoming the first COO, Jake Tuzza becoming the head of distribution, and Paul Bernardi, Troy Chakarun, and Hugh Ferry being named leaders of the intermediary distribution team.