News & Commentary

NN Investment Partners joins the Climate Action 100+ initiative

12/12/2017 Valentijn van Nieuwenhuijzen

To enhance long-term investor value and instigate positive change in terms of sustainability, NN Investment Partners (NN IP) has been actively engaging on climate risk with companies in utilities sector since 2016. Now NN IP expands its engagement to the chemicals sector by joining the global Climate Action 100+ initiative.

2018 outlook: Exploiting opportunities in a rising yield environment

23/11/2017 Valentijn van Nieuwenhuijzen

• Global growth, supported across sectors and regions, is expected to stabilise at healthy levels in 2018 • Our research on drivers of market behaviour points at a still favourable environment for relatively risky assets • Equities are our preferred asset class, supported by a benign macro and earnings outlook as well as positive behavioural dynamics • We like Japan, emerging markets and Eurozone equities, while we prefer cyclical exposure based on strong macro data and moderately rising bond yields • Fixed Income assets are challenged by rising interest rates and tight valuations; a flexible allocation towards shorter duration and growth exposure is advised

Impact investing is about changing the world for the better

22/11/2017 Willem Schramade

Impact investing, the investment strategy that intends to generate a measurable, beneficial social or environmental impact alongside a financial return, has many challenges. For example, one could easily be discouraged by the poor quality of data and the low level of understanding. Impact investing’s focus on changing the world makes it even more difficult than incorporating environmental, social and governance (ESG) factors. Most ESG analysis is still about assessing the current ESG state, although the more advanced ESG investors now focus on ESG improvement – a major driver of alpha generation as our research with the European Centre for Corporate Engagement (ECCE) has shown. Impact investing goes even further. It aims to bring about a vastly better state of the world – while being short of data and a common language than ESG.

Impact investing is about changing the world for the better

22/11/2017 Willem Schramade

Impact investing, the investment strategy that intends to generate a measurable, beneficial social or environmental impact alongside a financial return, has many challenges. For example, one could easily be discouraged by the poor quality of data and the low level of understanding. Impact investing’s focus on changing the world makes it even more difficult than incorporating environmental, social and governance (ESG) factors. Most ESG analysis is still about assessing the current ESG state, although the more advanced ESG investors now focus on ESG improvement – a major driver of alpha generation as our research with the European Centre for Corporate Engagement (ECCE) has shown. Impact investing goes even further. It aims to bring about a vastly better state of the world – while being short of data and a common language than ESG.

Funding Asia’s infrastructure needs

15/11/2017 Joyce Tan

In early August, Indonesia’s private power producer Paiton Energy successfully launched two long-dated bonds amounting to USD 2 billion. These project bonds – issued to finance the supply of electricity to the country’s state-owned utility Perusahaan Listrik Negara (PLN) – are currently among the first of their kind in the offshore Asian bond market.

Alternative credit offers longer-term stability for matching portfolios

13/11/2017 Bart Oldenkamp

The uncertainty posed by rising interest rates when western central banks start normalising their monetary policies is likely to create substantial challenges for institutional investors seeking to match their portfolio of assets to their liabilities. Even though many investors anticipate rising interest rates, it is uncertain how the economy will unfold and how balance sheets will be affected. Investors may therefore consider ‘scenario analysis’ to assess the various potential economic outcomes and create better investments outcomes over the longer-term. We believe portfolios can also be made more robust by investing in less liquid investments such as alternative credit.

5 burning questions on Alternative Credit from institutional investors

08/11/2017 Gabriella Kindert

Alternative Credit is a dynamic and rather complex investment category that has been growing rapidly for a number of years. The asset class refers to loans that are negotiated on the private market and are not publicly traded. The different sub-asset classes -such as loans for residential and commercial real estate, financing corporates, infrastructure or ECA loans- within Alternative Credit are especially popular among institutional investors as instruments to generate additional returns and enhance diversification. NN Investment Partners (NN IP)collected and answered the five most burning questions from institutional investors.

World-beating economic growth will likely drive returns in Frontier Market Debt

06/11/2017 Marco Ruijer

The world-beating economic growth that Frontier Markets are set to generate in the coming years means the bonds that they issue offer investors outstanding potential. Frontier Market Debt (FMD) captures the potential of the next generation of emerging markets, which have already attracted many investors seeking yield and portfolio diversification.

Alternative credit will help investors stay afloat as interest rates rise

30/10/2017 Petra Stassen - van Lochem

Increasing the exposure to alternative credit in a portfolio could enable investors to protect their fixed income portfolios against rising interest rates when western governments normalise their monetary policies. Several sub-asset classes in the sector have floating rate coupons and offer attractive yield pick-up, better downside protection and characteristics that are beneficial in different interest rate environments. Such assets include commercial real estate (CRE) and export credit agency (ECA) loans.

How to play the reflation theme in equity markets?

26/10/2017 Nicolas Simar

The lack of inflationary pressures in Europe and US, despite solid macroeconomic data on both sides of the Atlantic and nearly full employment situations in Germany and the US, has maintained bond yields at depressed levels. The direct consequence of this low yield environment on the equity market has been translated into a very narrow equity market leadership since the start of the year. This is highlighted by the massive outperformance of the quality growth style; meaning stocks trading typically at high valuation multiples, strong balance sheets and with high earnings expectations. Industries like Information Technology or e-commerce related sectors have seen a significant re-rating since the start of 2017, especially in the US and within Emerging Markets where the IT sector now represents nearly one third of the MSCI Emerging Markets index. While we cannot ignore the individual merits of those companies and the disruption they might create - for example the rise of e-commerce and its impact on brick & mortar retailers - we should not forget the valuation angle when investing in any asset class.