News & Commentary
Brazil’s elections come at a difficult moment, with the presidential candidates under heavy market pressure to come up with a credible plan to reduce the fiscal gap. If the next president, to be elected in October, has no credible plan to control social security spending, financial markets are likely to sell off sharply, pushing the real lower, interest rates higher and putting increased pressure on the new Brazilian leadership to act. Maarten-Jan Bakkum, Senior Emerging Markets Strategist at NN Investment Partners explains:
NN Investment Partners (NN IP) is pleased to announce the appointment of Rani Piputri as Head of Automated Intelligence Investing, as of 1 September 2018. The appointment of Piputri underlines NN IP’s commitment to continuously invest in the next generation of research which utilizes digital technology, new data sources and further innovation of our investment approach.
NN Investment Partner’s (NN IP) NN Dutch Residential Mortgage Fund surpassed the EUR 2bn mark as of end May 2018. Since its inception in November 2015, the Fund has been growing steadily. This milestone underlines that investors increasingly invest in Dutch mortgages in a low yield environment.
NN Investment Partners (NN IP) is pleased to announce the appointment of Maarten Geerdink as Head of European Equities and Lead Portfolio Manager of its systematically-driven European Equity strategies.
Turkey’s economic problems and escalating tensions with the United States have dominated the headlines in recent days, causing a spike in risk aversion among investors globally and knocking confidence in emerging market (EM) assets. In the middle of this turmoil, NN Investment Partners (NN IP) has reduced its equity exposure to neutral. The Multi Asset team has also identified other factors than the Turkey crisis that may weigh on equity markets going forward, including a fading support from earnings momentum, weak sentiment, flow and technical indicators and other geopolitical risk factors like trade policy and the Italian budget discussion.
• The recent market correction was associated with increased value in Frontier Markets Debt (FMD) while the fundamentals remain strong. • In the very short term, NN Investment Partner (NN IP) remains cautious given headline risks and the prospect of a more challenging technical backdrop towards year-end. • After a strong snap back we continue to look for positive FMD returns on a six to twelve month horizon, with clear potential for strong idiosyncratic investment cases, in particular in some African states such as Ghana and Egypt.
Improving market dynamics, including better investor sentiment, low positioning and positive price momentum, means the chances of a major equities correction of 10%-plus are low. The likelihood is lessened further by strong corporate fundamentals, as demonstrated by one of the best US earnings seasons in Q2 of the past years; good macro data pointing to consolidation at a healthy level; gradual and predictable central bank policies; and the start of targeted Chinese easing to counter the growth slowdown and negative trade impact.
• Chinese authorities continue to push for deleveraging of the economy • High-yield property developers are affected by tight funding conditions • We prefer debt issued by larger property developers with strong liquidity profiles
NN Investment Partners (NN IP) has again received the top score for its excellent Strategy & Governance approach to responsible investing and ESG integration. The A+ score was awarded by the Principles for Responsible Investment (PRI), underlining NN IP’s performance. NN IP has been a signatory of the United Nations-supported PRI since 2008, and has been active in responsible investing since 1999.
Europe’s High-Yield Bonds market will soon present a strong entry point to investors with yields of approximately 4% on offer following re-pricing in recent months caused by new issuance, trade war fears and turbulent Italian politics, according to NN Investment partners (NN IP). Re-pricing in the market has seen yields rise from below 3% since the end of last year.