Tjibbe Hoekstra

An average of 45% of active equity risk taken by institutional investors can be regarded as uncompensated, according to a study by Northern Trust Asset Management. Investors that use active management have the highest share of uncompensated risk in their portfolios.

European credit markets have hardly responded to the reports about the second coronavirus wave gripping the continent. This does not mean investors are complacent, according to Richard Ford, head of corporate bonds at Morgan Stanley Investment Management. Credit markets have been in waiting mode for a while, and have good reasons for it.

Investors will face tough challenges in the coming years, according to Pimco. While volatility will remain high due to the presence of numerous potential ‘disruptors’, return prospects have never been lower.

The weakening dollar has been a boon for emerging market debt in recent months. Spreads have narrowed and inflows quickly turned positive again. However, investors seem to already be looking for the exit again.

European banks are focusing their innovation efforts on customer experience, a study by PwC Luxembourg has found. Though the study was conducted before the outbreak of the novel coronavirus, PwC’s Banking Industry Leader Roxane Haas believes Covid-19 will lead to a further acceleration of innovation in the field.

The high-yield market has recovered nicely from the corona-induced market crash, but further price appreciation is becoming increasingly unlikely, says manager Ulrich Gerhard of the BNY Mellon Global Short-Dated High Yield Bond Fund in an interview with Investment Officer.

After the relaxation of the inflation target by the Fed, investment experts are rushing to predict a sustained rise in inflation. But for now, there’s no sign of inflation at all. Last week it even turned out that, for the first time since 2016, price levels in the eurozone had actually fallen.

The German DAX Index has recovered remarkably quickly from the corona slump. Moreover, it’s the best-performing equity market in Europe this year. Germany is benefiting from its pro-active corona approach and the pick-up in economic activity in China, its main export destination, says Christoph Ohme, senior portfolio manager for German equities at asset manager DWS. But German companies now have to live up to investors’ expectations.

Could the coronavirus crisis prove to be a blessing in disguise for the financial industry in Luxembourg? It seems to have accelerated the adoption of new technologies in a sector that is traditionally somewhat resistant to innovation, and offers fresh opportunities to cut costs.

The income of Degroof Petercam Luxembourg’s private banking division has not been dented by the coronavirus crisis. To the contrary, results have been ‘above expectations’ thanks to a sharp increase in trading revenue, says its head Kris De Souter in an interview with Investment Officer.