Knowledge Series
In this article FIIG's research team discusses the analysis of the FY23 reporting season, where insights into credit portfolio positions and future expectations are provided. In the analysis, over 30 credits were covered, including Australian REITs, focusing on aspects such as devaluations, interest rates, and market perceptions. Despite potential risks, there is confidence in the stability of these REITs, mainly due to their investment-grade ratings, manageable gearing, and covenant compliance.
Education (advanced)
Credit ratings are an indication of perceived risk. Each year S&P Global Ratings releases a global report that shows defaults as well as rating movements (upgrades and downgrades).
Education (advanced)
The Deputy Head of Research discusses strategies for maximizing returns in a fixed income portfolio through active trading, emphasizing the importance of understanding bond components, market conditions, and credit risk to enhance portfolio returns. The article highlights the importance of understanding the constituent parts of each bond, such as risk-free rates and credit spreads, and how they contribute to the bond's value. It also emphasizes the significance of considering factors like the shape of the risk-free curve and credit spreads when making buying and selling decisions. By combining knowledge of bond components, market conditions, and credit risk, investors can enhance their fixed income portfolio returns.
Education (advanced)
Assessing the performance of an RMBS transaction involves closely examining various factors, including rating performance, principal amortization, arrears evolution, weighted average loan-to-value ratio, and net losses on foreclosed loans, all of which can be tracked through monthly reports providing valuable insights on loan behavior; despite fluctuations in the residential housing loan market, Australian RMBS transactions have consistently exhibited strong performance, highlighting the resilience of these structures.
Education (advanced)
RMBS transactions are designed to offer a range of risks and returns to suit a number of different investors. This will go from the most senior tranche that has priority over cash flows and the lowest overall risk to the most junior tranche, with equity-like risks and rewards.
Education (advanced)
Residential Mortgage Backed Securities are a popular choice for wholesale investors as they can choose the risk and return they seek and the securities offer a premium over similarly rated corporate bonds. Here we explore some basic features of these securities and outline what makes them different to vanilla corporate bonds.
Knowledge Series
In this final article in the series we look at three more risks faced by bond investors - liquidity, foreign exchange, and position sizing.
Knowledge Series
In this second article on Portfolio Construction we will delve into the two main risks faced by bond investors – the risk of not being paid back – or credit risk – and the risk of the market price of your bond investment moving due to a change in the interest rate or yield of the bond – called interest rate risk.
Knowledge Series
Welcome to the first in our series of articles looking at the various inputs that go into our way of thinking about portfolio construction.
Knowledge Series
In this final edition in the Benefits of being a Wholesale Client series, we will look at FIIG's Managed Income Portfolio Service.