Years from now, when historians look at the “big ease” after the “great recession” of 2008, we suspect the reviews of some central bankers of the recent era will not be favourable.
Menu
Years from now, when historians look at the “big ease” after the “great recession” of 2008, we suspect the reviews of some central bankers of the recent era will not be favourable.
We do not see disruption risk as large or rapid enough to hit major banks’ ability to repay bonds.
The A$ corporate bond market, overall, appears to be around fair value to us.
The risk of getting “run over by a steamroller” appears ever more relevant today.
Lessons learnt from the collapse of a Spanish bank, two Italian banks and a missed payment on tier one notes from a German bank.
Trying to tame China’s extreme corporate leverage is akin to tapping on your car’s brakes while driving on an icy road. Tap too hard and you can lose control.
The reasons behind Australian retirement funds’ preference for deposits over bonds have evaporated.
At the individual bank level, high reliance on brokers may be a key differentiating factor in a bank’s financial health should Australian mortgage losses start to rise.
Right now, Spectrum sees floating rate notes in investment grade companies as offering the best risk-return outlook in the A$ bond market.
To abstain from investing in the largest part of A$ corporate bond market – Australian banks – on fears that problems may emerge is, in our view, a dis-service to investors.
Spectrum Asset Management Limited was founded in 2001 to manage investments in credit securities.
ABN 31 096 442 198
