Industry news and views from Panacea and our partners.
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Axa IM: More pain threatened
With sentiment so weak and global risks so stark, keeping money in cash is not a bad strategy. Rates are higher than they have been since the start of the millennium.
AXA IM: UK Reaction: Recession on the horizon
GDP fell by 0.3% in August following growth of 0.1% in July (revised down from 0.2%) below consensus expectations of GDP remaining flat. Alongside sizeable downward revisions to July’s numbers, this confirms the weakness in economy and the UK economy is likely in recession.
AXA IM: UK Reaction: Unemployment shifts lower on shrinking workforce
The August LFS data showed the UK labour market remains hot and whilst labour demand is beginning to cool, constrained supply and rising inactivity is maintaining pressure.
AXA IM: Artificial Intelligence: Responsible AI and the path to long-term growth
Artificial Intelligence (AI) has drastically transformed the business environment and become critical to companies across a broad range of sectors – from finance to healthcare and automotive.
AXA IM: Biodiversity loss: Understanding and responding to a global systemic risk
One of the fundamental motivations for responsible investment is to better understand present and future systemic risks. In recent years this momentum has seen climate and biodiversity emerge as key themes. Climate has understandably dominated, but we believe damage to the ecosystems that support life on land and in the oceans represents an equivalent threat to long-term economic sustainability.
AXA IM: Be patient, get paid
Central banks are far from declaring victory over inflation. They need demand to slow. They need a recession. The bond market believes inflation will fall eventually, but the message is clear. Short-term, rates are still going up and picking the top is a bit of a gamble. Best to restrict risk exposure and benefit from higher yields at the short-end. The risk rally – or at least one that has real legs – is in the future. Be patient until the rate cycle tops out.
AXA IM: Take Two: BoE intervenes after sterling hits record low, Eurozone inflation hits record
The Bank of England (BoE) said it would buy UK government debt – known as gilts – to address a dramatic market reaction to Chancellor Kwasi Kwarteng’s announced fiscal plans.
AXA IM: London Lessons
The Bank of England has bought the government some time to re-think its plans, but volatility is likely to remain high. Reassuring markets by curbing spending to offset the permanent tax cuts is the government’s preferred course, but the political cost would be large. Funding the immediate relief package with a windfall tax on energy companies, or reversing the tax cuts are other options, but they also come with a potential cost in terms of political stability.
AXA IM: Outlook 2022: Policy making amidst uncertainty
Policymakers face significant challenges. With financial markets arguably ‘priced for perfection’, any policy missteps could result in significant volatility. Watch the video featuring Aidan Yao, Senior Economist, AXA IM, to learn more.
AXA IM: Outlook 2022: Labour markets after the pandemic – the threat of persistent inflation
Labour market structures have shifted, supply-chain issues continue to persist and rising inflation continues to be a major concern. In this video, David Page, Head of Macro Economic Research, AXA IM, takes a look at the challenges facing labour markets
AXA IM: Outlook 2022: Moving to a net-zero world
t has become impossible to think about the economic outlook without considering the impact of the fight against climate change. An essential part of the process is to reallocate capital towards the sectors and businesses which are transitioning to a net zero economy. Watch this video featuring Gilles Moëc, AXA Group Chief Economist & Head of Research at AXA IM, to find out more about how the energy transition will influence the economic backdrop in 2022 and beyond.
AXA IM: Outlook 2022: The shifting electoral landscape
The political landscape remains fractious and 2022 will see several key elections take place, which could shift political direction.
AXA IM: Outlook 2022: Inflation – 'mostly' transitory
The coming year is likely to see inflation remain a concern, while interest rates will start to rise in many major markets as central banks tighten monetary policy.
AX IM: Outlook 2022: Coping with COVID
As we head towards the second anniversary of the pandemic, the virus remains a key concern for investors. While some countries are increasing vaccination rates, others are seeing new outbreaks.
AX IM: How the pandemic has given a new meaning to ageing
Within the next 20 years, the number of people in the UK aged 65 and over is set to increase 40 per cent.In the US, Europe and Japan, it is a similar story: people around the world are living longer than ever before.
AXA IM: Alzheimer's breakthrough could drive a new wave of biotech innovation and investment
The accelerated approval of the first new Alzheimer's treatment in almost two decades looks set to be a potential game changer for the biotechnology sector. Alzheimer's disease is a type of dementia that affects memory and other cognitive abilities. Globally, around 50 million people suffer from dementia; there are almost 10 million new cases annually - and Alzheimer's is the most common form.
AXA IM: What does the delayed reopening mean for UK shares?
Despite being technically able to trade, June has brought a raft of difficulties for businesses in sectors such as tourism and leisure sector. A delay to the lifting of COVID rules means pubs and businesses continue to face tough trading, while the decision to move Portugal to the ‘Amber’ travel list has damaged public confidence in overseas holidays, possibly with implications for the rest of the summer.
AXA IM: Can ESG screening provide a buffer for fixed income investors?
The unprecedented monetary and fiscal stimulus put in place by governments and policymakers worldwide has supported bond markets for much of 2020 and 2021, but fixed income investors have faced challenging, volatile times nonetheless.
AXA Investing in high yield bonds
The high yield market has developed significantly over the past two decades, particularly with the emergence of European and Asian high yield markets. We believe the high yield market will continue to evolve, particularly in response to the Responsible Investment movement and the development of low carbon or green bond markets.
AXA IM: Time to think about the downside
Never be short duration for too long, be wary of risk assets when they are too expensive, always assume the England football team loses. Those three assumptions have served us pretty well over the years and into 2021, but before we get to bond land, congratulations to Italy on their hard-fought victory.
AXA IM: M&A: shuffling the pack in UK equities
M&A activity has been a welcome tailwind for UK equities this year. According to the FT, 2021 is on track to be the busiest year for private equity bids for UK and European assets on record, with private equity groups setting up new teams specifically to acquire UK-based businesses.
The Academy: Volatility (45 minutes)
How can market volatility shake up future returns from investments and how can different approaches mitigate its impact?
AXA IM: Why despite a global shortage, we expect continued growth in the semiconductor sector
A shortage of semiconductors is causing supply chain issues across the globe – but while there could be short-term disruption for some end-users, we believe that stronger demand and continued innovation remain beneficial for the chip manufacturing industry and its investors.
AXA IM: Growth is what you buy, value is what you get
Fortune has favoured the value investor over the past six months or so. The announcement and subsequent rollout of vaccines has led to a sharp outperformance for value stocks since the end of October 2020, with sectors such as banking, energy, mining and tourism & leisure making up for poor performance from the initial impact of COVID-19.
AXA IM: What a statue of the G7 leaders tells you about sustainable investing
The G7 Summit was held in Cornwall recently, with leaders promising to focus on climate change. While most of the talking appears to take place in the run-up to these events rather than during them, they do offer a focal point for campaigners on various issues.
AXA IM: The issue with passive fixed income
Many investors are reliant on fixed income securities to meet their long-term need for stable, income-generating assets. Often, that reliance extends to securities of traditional fixed income indices, bringing a series of risks into play for institutional and smaller investors alike.
AXA IM: Global short duration bonds to combat rising rates
The AXA Global Short Duration Bond Fund may suit investors looking for better returns than cash by taking an intermediate step into riskier assets while reducing sensitivity to rising interest rates. With the global economy recovering rapidly from the impact of COVID-19, central banks are likely to tighten monetary policy in the coming years.
AXA IM: London Calling: the latest on bonds and the Fed (again)
It’s said in London that you can wait for 20 minutes for a red bus, then three come along at once. It feels a bit like that for fixed income events at the moment, but hopefully you get the sense from below there’s a lot going on in bond land.
Understanding the fundamentals of active management (60 minutes)
With passive funds becoming increasingly popular due to their low-cost nature, what are the benefits of investing in active funds?
AXA IM: Where to go for risk?
We all know people have different approaches to risk. Some of us like to take physical risks in search of an adrenaline high, while others take investment risks chasing hot stocks. The majority of the population, we suspect, stick to the sofa, and there’s nothing inherently wrong with that.