Investment Strategies

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• EMD: Finding Fundamental Value Through the Storm

  The rapid spread of COVID-19, the precipitous fall in oil prices and the related shock to the global economy have sent markets—including EMD—into a tailspin in recent weeks. In this piece, we explore the resulting challenges and discuss opportunities beginning to emerge.

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• Distressed Debt: Despite Challenges, Opportunities Persist

  Recent market and economic volatility may be the trigger that distressed debt investors have been waiting for, but capitalizing on opportunities will require a different playbook than those of past cycles.

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• Private Credit: Why Last Cycle's Playbook Won't Work This Time

  Barings’ Jon Bock discusses the recent Insights paper he authored, which describes the mistakes that investors continue to make when allocating to private credit—and, importantly, how to avoid them.

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• Distressed Debt: Capturing Late-Cycle Value

  Barings’ Stuart Mathieson and Bryan High discuss how recent macro events and credit market dynamics are impacting the outlook for distressed debt.

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• Are CLOs Unfairly Vilified?

  Despite the late-cycle environment, we believe the recent negative headlines on CLOs are somewhat overstated, and do little justice to the many benefits of the asset class—which has delivered impressive risk-adjusted returns and low defaults over time.

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• What Can German Equity Investors Expect in the Months Ahead?

  While the phase one U.S.-China trade deal may provide a near-term boost for German equities, there are a number of risks on the horizon that could introduce volatility in the months ahead—making stock selection as important as ever.

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• Private Credit: Where We’ve Been, Where We’re Going

  Industry veterans Ian Fowler and Adam Wheeler describe the dramatic evolution of private credit markets and explain why quality of earnings and varied definitions of ‘senior’ risk could be at the center of the next credit market storm.

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• Sentiment Shift Fuels Lower-Rated Rally

  Uncovering relative value across high yield in 2020 may require looking in less obvious places.

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• EM Local Debt’s Time to Shine?

  Emerging markets (EM) local currency denominated debt may be poised to outperform.

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• Risk-on, Risk-off & Repeat

  Sentiment continues to swing back and forth in the collateralized loan obligation (CLO) market, but bifurcation remains the constant.

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• Rates, Rallies & Risks

  Investment grade credit markets posted a banner year in 2019; can the good times continue to roll?

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• Comeback Time for International Equities?

  Because the U.S. equity market is broad and deep, there will almost always be opportunities—but in aggregate, we think international equity markets may be more compelling over the next year.

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• U.S. Real Estate: More Reward in Core?

  As investors in the market continue to chase yield, the risk premium—or the reward for taking that risk—appears to be diminishing. In this environment, we’re seeing some of the best opportunities in the highest-quality assets.

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• The Continued Democratization of Private Equity

  Private equity is an asset class that has traditionally been available only to very large, sophisticated institutional investors. But this is changing rapidly—a trend we expect to accelerate in 2020.

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• Amid Rising ‘Mequity’ Risk, Boring Can Be Beautiful

  In both the U.S. and Europe, there is significant pressure both at the top and bottom ends of the middle market. As a result, we’re seeing potentially attractive value today in the more traditional, true middle market.

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• A Bright Spot in Higher-Yielding EM Corporate Debt

  Many EM regions have been engulfed in uncertainty for weeks or months. While these situations certainly represent risks, we also continue to find value—often in globally diversified companies that have been unfairly punished by markets because of where they’re domiciled.

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• 2020: An Inflection Point for EM Currencies?

  With the financial crisis more than a decade behind us, the global financial system seems poised to begin re-leveraging. This process, which would likely take years to play out, would provide a source of funding for EM currencies, and represent a significant tailwind.

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• Seeking Big Opportunities in Small Companies

  As Europe finds itself in a climate of lackluster growth and political volatility, with an equity market that has been on an unprecedented 10-year bull run, investors are searching for pockets of value. A long-term allocation to small-cap equities is one potential solution.

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• CLOs: When Technicals Create Opportunity

  Taryn Leonard and Melissa Ricco, Co-Heads of the Structured Credit investment team, discuss where they're seeing opportunities and risks today—and why technical factors are creating inefficiencies, and hence opportunities, in the current environment.

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• CLOs: Triple C's and Market Unease

  Taryn Leonard and Melissa Ricco, Co-Heads of Barings’ Structured Credit Investment Team, discuss the recent loan market weakness, and how technical pressures are creating value opportunities in the CLO market.

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• EM Debt: Warding Off Headwinds with Active Management

  Ricardo Adroguè, Head of Global Sovereign Debt and Currencies, addresses the many risks facing the global economy—specifically China, Argentina and the Middle East—and explains why active management is critical to performance.

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• Disruptive Technology: Keeping Pace With the Pace of Change

  Barings equity analysts, Matthew Ward and Colin Moar speak with Dr. Christopher Smart of the Barings Investment Institute about their recent whitepaper, “How Will Technological Disruption Strike Next?”

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• ESG for Sovereigns: One Size Does Not Fit All

  ESG has risen to the forefront of many investment strategies over the last decade. At Barings, our EM Sovereign Debt team takes a country-by-country approach, assessing ESG factors in the context of sustainability and—ultimately—creditworthiness.

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• Investing in Late-Cycle European Private Credit

  Adam Wheeler, Co-Head of Barings’ Global Private Finance Group, discusses the importance of discipline and risk management in today’s late-cycle environment.

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• ABS: Uncovering Opportunities Beyond the (IG) Index

  Amid an ongoing search for yield, with several potential risks on the horizon, there may be benefits to exploring opportunities outside of traditional corporate and government bonds—such as parts of the ABS universe.

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• EM Debt: Navigating the Geopolitical Noise

  From the Middle East to China to Argentina, investors face no shortage of geopolitical risks and negative headlines. But is there still value to be found across emerging markets? Dr. Ricardo Adrogué weighs in.

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• High Yield: A Time to be Nimble

  In this Q&A, Martin Horne, Head of Global Public Fixed Income, discusses the state of high yield markets amid a late-cycle environment, and why it’s critical to be nimble and selective in order to capture points of relative value.

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• Infrastructure Debt: Steady Activity, Lingering Macro Doubts

  Despite the expected seasonal summer slowdown, infrastructure debt financing deals remained steady overall in the third quarter of 2019—with strong activity in the U.S. and Canada, and slightly slowing activity in Europe, with a cautious eye toward Brexit.

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• The Power of Compounded Income

  Over 10 years into an economic recovery, we’ve continued to see new highs in equity indexes. In this Q&A, Darryl Lucas explains how a focus on resiliently growing companies, coupled with the power of compounded dividend and profits growth, can lead to strong returns over time.

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• IG CLOs: Strong Excess Return Potential, Lower Volatility

  IG CLOs can offer investors the benefits of spread pick-up and lower mark-to-market volatility, largely due to underlying collateral performance and structural security. But above all, manager selection is critical—even at the highest-rated tranches.

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• Structured Credit: Engaging Risk Tactics

  Deal flow remained steady in Q3, keeping primary market spreads range-bound. Against a backdrop of low global interest rates, we have seen increasing investor interest in European CLOs.

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• High Yield: Poised to Capture Relative Value

  Despite mounting uncertainty in the broader markets, high yield delivered broadly positive returns in Q3. As we continue to move through the late stages of a prolonged cycle, credit selection will be critical.

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• Investment Grade: Stable Fundamentals with Hints of Wear & Tear

  IG fundamentals held up relatively well in Q3, despite dampened sentiment and growing macro uncertainty. Spreads were unchanged, but may move wider before year-end.

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• Emerging Markets Debt: Taking a Hard (Currency) Stance

  EMD performance was muted in Q3, but valuations remain attractive and emerging economies are growing at a measured pace. We continue to favor hard currency assets, which are benefitting from lower rate expectations.

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• High Yield: Rates, Recessions and Relative Value

  While there is no shortage of risks to consider in today’s high yield markets—from ESG to the end of the credit cycle—Barings’ Martin Horne describes how taking a contrarian approach can help investors uncover pockets of value.

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• Emerging Markets Sovereign Debt: Does Active Management Pay?

  The performance of EM Sovereign Debt can—and does—vary widely from country to country. Barings’ Cem Karacadag explores how an active approach can be key to selecting the most attractive opportunities, while also avoiding the bad apples.

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• Equities: Is it Time for Dividends to Come Back in Style?

  In the latest episode of Streaming Income, Darryl Lucas, Head of Equity Income, provides insight into how the Barings team seeks to capitalize on the power of compounding dividends while aiming to lower risk in the process.

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• Are High Yield Investors Being Compensated for Risks?

  In the context of today’s fundamental backdrop and default outlook, spread levels suggest investors are being fairly compensated, relative to other points in the cycle, for the amount of risk they are taking.

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• European Real Estate: Late-Cycle Value from Manchester to Munich

  Can value still be found (or created) ten years into the European property market cycle? And if so, which sectors, geographies and risk profiles look most compelling? Barings’ Charles Weeks weighs in.

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• The GFC: 10 Years On

  The mid-market continues to attract private debt investors as the Fed cuts interest rates. Could this fuel the economy and rev up the deal market, or are we nearing the end of the credit cycle? Eric Lloyd recently weighed in with a panel of experts for PDI.

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• European Real Estate Equity: Uncovering Value City by City

  Charles Weeks, Head of Real Estate Equity for Europe and Asia Pacific, discusses the backdrop for European real estate markets, where the team is seeing the most value by sector and geography, and why they always take an active approach across strategies and investment styles.

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• Distressed Debt: Seeking Opportunity in Choppy Waters

  Stuart Mathieson, Head of Barings’ Global Special Situations group, and Bryan High, Co-Portfolio Manager of the strategy, discuss how the macro environment is impacting their outlook, and where they're seeing distressed debt opportunities today.

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• U.S. Loans: Challenged Market or Veiled Opportunity?

  With loan and bond yields currently comparable, we believe—in a somewhat contrarian view to the market—there is a good argument for investing in loans, particularly in the U.S., where the economy appears to be marginally stronger than in Europe.

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• Distressed Debt: How This Cycle May Be Different

  Barings’ Stuart Mathieson and Bryan High discuss the outlook and competitive landscape for distressed debt and consider the implications of the significant growth in private credit and European high yield since the last cycle.

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• Fixed Income: Upending the Conventional Approach

  Michael Freno, Head of Global Markets, shares his view on where value can still be found in fixed income, despite the uncertain current environment—and why investors may need to look beyond traditional indexes in high yield, investment grade and emerging markets debt.

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• Fixed Income: Looking Beyond the Index for Late-Cycle Value

  Head of Global Markets, Mike Freno, sheds light on how the Barings’ teams are finding value outside of traditional indexes across high yield, investment grade credit and emerging markets debt.

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• A CIO's Perspective

  Barings' Jonathan Bock caught up with industry veteran, William Spitz, on trends in today's private markets.

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• Private Credit: How Supply/Demand Dynamics are Shaping the Landscape

  Ian Fowler, Co-Head of the North American Private Finance Group, discusses the dynamics of each middle market segment—including upper-end style shift resulting from competitive pressures—and explains why the traditional middle is the sweet spot.

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• Global Emerging Markets Equities: Where Do We Stand?

  In this Q&A, William Palmer and Michael Levy, Co-Heads for Emerging and Frontier Equities, discuss their approach to accessing the asset class, current trends, and why recent headwinds may be becoming tailwinds.

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• Is There Style Drift in Middle Market Lending?

  Barings’ Ian Fowler weighs in on the supply/demand dynamics in the direct lending space and explains why looking at the middle market as one cohesive universe can be misleading.

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• High Yield Bonds & Loans: Where to Next?

  High yield markets roared back in the first quarter. Can market fundamentals and technicals support continued strength? And how should investors factor in risks ranging from possible recession, to ratings downgrades, to liquidity concerns? Barings’ David Mihalick weighs in.

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• How We Assess Investment Opportunities

  In this video, Barings Global Emerging Markets Equities team explains its investment approach by discussing an opportunity at one of its weekly meetings.

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• Searching for Unrecognized Growth

  In this video, Barings’ Global Head of Equities, Ghadir Cooper, explains how the equities platform consistently identifies mispriced opportunities.

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• EM Debt—A Brightening Picture?

  Barings’ Ricardo Adroguè and Omotunde Lawal highlight opportunities they’re seeing from Mexico and Brazil to more challenged geographies like Turkey and Argentina—and provide insight into how they’re thinking about political hotspots like Venezuela.

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• The Changing Face of Investment Grade Credit

  In a recent interview, David Nagle, CFA, portfolio manager in the Investment Grade Fixed Income Group, discussed the investment grade credit market, including some of the issues garnering headlines recently and how the market has evolved through the years.

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• Investment Grade Credit—Rates, BBBs and ABS

  From inverted yield curves to potential BBB downgrade risk, Barings’ David Nagle discusses some of the key challenges facing investors in the IG markets today.

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• Climbing High Yield’s Wall of Worry

  In this Q&A, Barings’ Head of Global High Yield, Martin Horne, weighs in on some of the major risks facing the high yield markets today and discusses where his team is seeing opportunities.

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• Assessing Today’s Private Credit Landscape

  Private credit markets have seen an increase in investor demand over the last decade. But with competition fierce and the cycle maturing, what factors should investors consider moving forward? Barings’ Eric Lloyd identifies where he and his team see the best relative value today.

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• Seeking Value in Today’s Private Credit Market

  In this Q&A, Barings’ Eric Lloyd discusses his team’s approach to navigating the risks and capitalizing on the opportunities across the global private credit markets.

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• How Opportunistic Is Your Investment Grade Allocation?

  Michael Freno, Head of Global Markets, discusses the benefits of 'multi-asset' or 'opportunistic' credit portfolios and the newly-launched Barings Global Investment Grade Strategies.

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