Emerging market equities offer investors a wide range of diversification opportunities across economies with a solid post-pandemic growth profile that include, but also stretch beyond, China and the wider Asian region. Quang Nguyen, head of global emerging market equities, argues the case for a broad perspective and active portfolio management.

Market weekly: There is more to emerging market equities

Addressing ecosystem restoration is just as pressing as tackling CO2 emissions and can generate billions of dollars of investment opportunities, as Ulrik Fugmann and Edward Lees, co-heads of the Environmental Strategies Group, explain.

Market weekly – Ecosystem restoration: Why should investors be interested?

What will be the consequences of the Covid-19 pandemic for the food and agriculture sector? How is the transition towards more sustainable food production and consumption affected? Agne Rackauskaite, co-portfolio manager of Impax Asset Management’s sustainable food strategy, gives investors her view on the post-pandemic outlook.

Market weekly – Pandemic leaves consumers smarter about their food

At the centre of a pandemic-induced boom, stern regulation efforts and forays into new turf, the technology sector is making almost daily headlines and requires robust research to separate the possibilities from the pitfalls, argues Pamela Hegarty, lead portfolio manager with a focus on information technology and communication services.

Market weekly – Transforming tech: Innovation and regulation

Globalisation, regulation and deregulation, digitalisation and innovation are playing an important role in reshaping economies, sectors and industries and these megatrends are creating thematic investment opportunities for investors. Koye Somefun, head of multi-asset solutions, sets out the characteristics of this approach and discusses the criteria investors should look at.

Market weekly – The why and how of thematic investing

Confronted with low, but rising rates and frothy equity valuations, large investors are having to look elsewhere for investments offering both attractive long-run returns and modest to low volatility. Julien Halfon, head of pensions and corporate solutions, discusses the appeal of investing in private markets and harvesting the illiquidity premium while incorporating ESG selection criteria.

Market weekly – Diversified private markets: A source of illiquidity premiums

The recent UN climate change conference in Glasgow has if anything brought a broader focus on environmental issues and added to the growing awareness and momentum behind the need for positive change, argue Edward Lees and Ulrik Fugmann of the Environmental Strategies Group. Here they identify promising sectors and present their approach to sustainable investing.

Market weekly – A portfolio-level COP26 scorecard

Leaving behind a momentous year marked by new phases of the pandemic and by sputtering efforts to re-start the global economy, we look ahead to 2022. Can we overcome the effects of issues such as disrupted supply chains and shifts in consumer demand? How can investors navigate the ‘rapids’ that will characterise the next stages of the economic recovery?

Market weekly – Investors will need to ‘shoot the rapids’ in 2022

Stronger economic fundamentals and vaccination progress mean the 2022 outlook for Asian equities, and more broadly global emerging market equities, is rosier now than it was at this time a year ago, argues Zhikai Chen, head of Asian equities.

Market weekly – Emerging markets head into 2022 in better shape

At first sight, tighter US monetary policy and stubbornly high US inflation does not seem an ideal mix for bonds. There’s a lot more to it than that, argues James McAlevey, head of multi-sector fixed income. By embracing a broad opportunity set, investors can benefit from the potential for attractive risk-adjusted returns offered via active allocation.

Talking heads – “A lot of value to be had” in multi-sector fixed income

To tackle poverty, climate change and improved access to, for example, education, central banks and governments need to rethink fiscal policy and the impact of deficit spending. Trillions of US dollars are required to achieve these goals. Alex Bernhardt, global head of sustainability research, talks about how it could be done.

Talking heads – Financing sustainable development

The prospect of a momentous pivot in US monetary policy with gradual withdrawal of the generous provision of liquidity has left markets pondering over valuations. Investors face a challenging year in which they will need to search for assets suited to a new inflationary regime. On our Talking heads podcast, Daniel Morris, chief market strategist, and Andrew Craig, co-head of the Investment Insights centre, discuss the outlook for fixed income, the promise of emerging market debt (and currencies), the prospects for corporate bonds, and the areas of – longer-term – interest once equity valuations have normalised.

Talking heads – Looking for direction as Fed pivots

In a contrarian call, our emerging market debt team sees appealing opportunities in EM bonds. Specifically in those markets where inflation is likely to peak ahead of developed markets in which investors are having to adjust to the prospect of higher real yields. EM segments that were oversold late last year also represent areas worth investor attention as a recovery takes hold.

Talking heads – Emerging market debt: Don’t look the other way

Chinese equities look well set to confront the challenges that Omicron, stricter regulation and moderating growth will bring. Revised earnings expectations and valuations mean their  second-half prospects are brighter. Looser fiscal and monetary policies have the potential to provide a further uplift for sentiment.

Talking heads – Building back stability in Chinese equities

Our Environmental Strategies Group talk to businesses that, regardless of their size, are making a big impact. In the first of this series we speak to John Berger, CEO of Sunnova Energy International, a residential solar and energy storage company, about the energy transition and the role investors can play in fighting climate change.

Uncapped impact: Sunnova and the energy transition

Investing in water-related stocks means tapping into a multi-decade opportunity for growth and innovation. Demand in this segment stretches across the breadth of the economy – from tackling ageing water infrastructure to ensuring healthy drinking water and efficient waste water treatment.

Talking heads – Health and climate concerns drive water segment demand

Heightened market volatility and uncertainty over the pace at which the ECB will unwind its bond purchases are the main tests investors in European corporate bonds have to contend with currently. Mitigating factors such as robust earnings, strong cash positions and low defaults could be negated by concerns the central bank might need to take tougher action to contain inflation.

Talking heads – Testing times for corporate bonds

Global markets have seen wide swings as concerns over tighter supplies and crimped trade in the wake of Russia’s invasion of Ukraine caused investors to head for safe havens away from risk assets. However, Guy Davies, chief investment officer for fundamental active equities, advises against impulsive action and argues for a focus on cash flows when picking promising stocks.

Talking heads – Three questions on geopolitical upheaval and equity investing

Global bond markets already faced challenging times before the conflict in Ukraine, but they at least had a clear expectation to work with: the prospect of firm central bank action to tackle rising inflation. Geopolitical developments have upended the calculus, undermining inflation and growth forecasts and weakening the fundamentals across the board for the foreseeable future.

Talking heads – Geopolitical storm tugs at fixed income moorings

To help multi-asset portfolios cope with the geopolitical shock of Russia’s invasion of Ukraine, a move into cash can be useful. At BNP Paribas Asset Management, we have implemented such an approach to ride the recent market volatility and use bounces to sell assets whose fortunes have now changed and build or expand other, more defensive positions at attractive prices.

Talking heads – Putting cash to work in volatile markets

Inflation has bounced back vigorously from its pandemic-era lows: The headline rate for the US consumer price index has reached a 40-year high, while in the eurozone, the headline rate for the harmonised index of consumer prices is at its highest in 20 years. What does this mean for investors?

Talking Heads - The inflation revival

Value investing remains a worthwhile approach, even after an extended period of underperformance. A rebound has now set in that looks sustainable. Rising interest rates should be supportive of the value style and value still looks cheap relative to growth.

Talking heads – Look for value in the value style

Foreign exchange (FX) markets can be viewed as a derivative asset in that they tend to be driven by volatility in other asset markets. Since 2015, most of the leading currencies have traded in relatively confined ranges. With volatility rising in equity, bond and commodity markets, there are good reasons to expect a new regime in currency markets.

Talking heads - A new foreign exchange regime?

Talking heads - China to deliver on growth in 2022

US small-cap stocks are trading near 10-year lows on various metrics, which disregards their  typical resilience in periods of rising interest rates and slower economic growth.

Talking heads – US small caps – Fortune favours the bold

Private equity impact investing offers investors access to an attractive asset class that can help diversify a portfolio and earn attractive returns. In addition, it offers an extra-financial component by enabling them to contribute – and help finance – solutions to pressing social and environmental problems from access to healthcare to promoting a circular economy.

Talking heads – Introducing private equity impact investing

Listen to this Talking heads podcast with Pam as she talks to chief market strategist Daniel Morris about the secular drivers of demand and the prospects for technological companies.

Talking heads – Maintaining course through volatility in disruptive technology

Listen to this edition of Talking heads as Delphine discusses the growing appreciation of these social factors with chief market strategist Daniel Morris. Rather than a focus on solutions, she highlights the relevance of assessing company practices, i.e. how a company interacts with stakeholders such as employees, consumers, suppliers and society. She argues that doing well in areas such as workforce relations and worker education benefits a company’s long-run financial performance.

Talking heads - ESG investing and the role of the ‘S’ in company performance

Listen to this Talking heads podcast with portfolio manager Agne Rackauskaite as she discusses the challenges with Andrew Craig, co-head Investment Insights Centre. Beyond the war in Ukraine, the challenges ahead range from population growth to climate change. Agne highlights the benefits of a shift to more resource-efficient plant-based foods, better packaging and sophisticated irrigation and harvest technologies – and the related investment opportunities.

Talking Heads - Solutions to improve food security

Listen to this Talking heads podcast with Christophe Montcerisier, head of real estate debt, and chief market strategist Daniel Morris. They discuss the absence of a direct and immediate link between higher interest rates and the performance of real estate debt and the defensive characteristics of the asset class. Among other things, its solidity derives from some of the pandemic-induced structural changes, including a shift in office use and greater demand for suburban properties.

Talking Heads - An attractive, defensive investment: real estate debt

Until recently, humanity has relied on chemical solutions to address its biggest challenges. For example, our ability to grow food, to defend livestock against disease and to safeguard human health, all depend in part on chemical solutions. Today is no different. Yet resistance to chemicals is rising rapidly, exacerbated by climate change and ecosystem degradation.  In the second of this series, Ulrik Fugmann and Edward Lees, co-heads of our Environmental Strategies Group, talk to Andrey Zarur, CEO and co-founder of GreenLight Biosciences, about how his company is using RNA technology to create a new generation of chemical free pest control methods. They consider the benefits of such innovations including enhanced food and biodiversity security, as well as the growing role investors can play in this area. The uncapped impact series brings you up close and personal with our Environmental Strategies Group and businesses that, regardless of their size, are making a big impact.

The uncapped impact series with GreenLight Biosciences

Senior investment specialist for global equities Ramon Esteruelas briefs chief market strategist Daniel Morris on four books he has read on climate change. The books discuss the relevance of climate change science and the reliability of projections, the availability of adaptive and mitigating solutions and breakthroughs, the long road to net zero, and the need for a rethink on growth.

Talking heads – Four books to read on climate change

As a broad asset class underlying the full spectrum of economic activity and a non-cyclical slant, infrastructure debt has attributes that stand out for investors. One key point is that many of the services financed with these bonds are indexed, protecting cash flows from rising inflation. Also, the debt typically has floating rate coupons that are adjusted when interest rates rise.

Talking heads - The shock-absorbing nature of infrastructure debt

Listen to this Talking heads podcast with Anaïs Boussie, our senior European economist as she discusses the outlook and perspectives for 2023 and 2024. She outlines the policy measures she expects the ECB and national governments to employ in coping with the consequences of the energy crisis and weak economic growth.

Talking Heads - A grim macroeconomic outlook for Europe

Listen to this Talking heads podcast with Vanessa Ritter, Head of Global Loans as she discusses the current environment and perspectives for the global loan market. She outlines the current opportunities and rational for investing in this asset class.

Talking Heads - Opportunity knocks for global loans

Listen to this Talking heads podcast with Edward Lees, co-head environmental strategies group, and chief market strategist Daniel Morris. They discuss opportunities ranging from US infrastructure and securing supply chains for electric vehicle batteries to EV software and residential solar panels. Lees warns that funding support for under-pressure households should target the beneficiaries of high oil and gas prices without jeopardising the capital spending needed to speed up the energy transition.

Talking Heads - Energy crisis response should include faster transition

While equity markets are feeling the pinch from rising real rates, earnings reports and guidance are yet to reflect the effects of the encroaching recession. This leaves markets vulnerable to a downside correction once the message sinks in.

Talking heads – Slow-motion recession leaves equities exposed

Investors shell-shocked by the fallout from high inflation, rising interest rates and slowing economies and looking to alternative markets for portfolio diversification and attractive returns might want to consider a relatively young and little known asset class: direct small lending.

Talking heads – As an alternative, consider a direct small lending portfolio

Talking heads – Thematic investing: looking beyond the crises

Talking heads – Flies in the ‘green’ ointment? Take a longer-term view

Investment Insights is the podcast channel for BNP Paribas Asset Management and features in-depth commentary on the topics that really matter to investors.

Each week, Daniel Morris, Chief Market Strategist at BNP Paribas Asset Management, joins our investment experts to analyse the market through the lens of sustainability.

Alongside our weekly analysis, we’ll also be releasing the Uncapped Impact Series, about impact investing, every few weeks.

For more insights, visit our Viewpoint website at https://viewpoint.bnpparibas-am.com/

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