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Investment Blog
How we see the World
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Current Market Outlook
Q2 2022-Quarterly Investment Letter
Inflation pressure is mounting and we deal with a mature business cycle with the risk of entering into a period of stagflation. In the short-term, economic downside risks are rising.
Central banks weigh price stability over economic growth concerns and have started a new hiking cycle. A vicious wage-price inflation spiral is possible.
Geopolitical escalation is a human tragedy. Moreover, it will have a long-lasting impact with a new global trade order and increased unity of the West (“Zeitenwende!”).
More and fast spending for defense and renewable energy in Europe, which leads to new job creation and supports economic growth.
Peak profit margins are under severe pressure in 2022 with rising wages, higher commodity prices, increasing rates and a softer outlook for consumer demand. Price pressure will ease in 2023, but war in Ukraine makes projections difficult.
Newsflash
Alpinum Alternative Investment Strategy – Downside Resilience
The markets are anything but calm at the moment, and this applies to all asset classes. We are feeling comfortable in this environment right now, as our absolute return philosophy and draw down risk management is in full effect. The Alpinum Alternative Investment Strategy is
Short Term High Yield Rates are attractive again @ 7% p.a.
Yields of US short term low grade bonds broke through the 10-years average of 5.7% and reached a level slightly above 7% in early May. The yield curve steepening by more than 200 bps over the last 6 months (please see chart 2 in the
Yield curve inversion signals economic weakness ahead of us
In macro-finance, it is well known that an inverted yield curve is signalling a recession or at the very minimum, it is indicating that the economy is operating in a late cycle. For example, the 2-year/10-year Treasury slope has inverted in advance of 7 of
EUR Swap rates soar and put pressure on short-term bonds
An interest rate swap is an agreement between two parties to exchange fixed and floating interest payments with each other over a specified period of time. At the time of the swap agreement, the total value of the fixed rate flows of the swap equals
Alternative Credit Letter
Alpinum Investment Management’s Alternative Credit Letter offers our experts’ latest assessments on the global credit markets, as well as fiscal and monetary policy developments.
Short Term High Yield Rates are attractive again @ 7% p.a.
Yields of US short term low grade bonds broke through the 10-years average of 5.7% and reached a level of 6.9%. Since the Fed signalled a faster pace of interest rate increases in the coming
Yield curve inversion signals economic weakness ahead of us
In macro-finance, it is well known that an inverted yield curve is signaling a recession or at the very minimum, it is indicating that the economy is operating in a late cycle. For example, the
Credit spreads spiked to August 2020 level in two weeks!
Within a matter of only two weeks, European High Yield spreads have jumped to a spread level of 480 bps, well above the last 5 years average of 366 bps and back at August 2020
Stay up to date and subscribe to our Alternative Credit Letter.
Insights
In a series of articles on our investment blog, we discuss and present investment opportunities we actively use in our building blocks to form our absolute return portfolios.
Hedge Funds Review & Outlook
Hedge funds delivered a solid positive performance in 2021, covering all sub-strategies. In our working paper “Investment Insight – Hedge Funds”, we shed light on 2021 from a hedge fund perspective, explaining in- and outflows
Cash Plus Solution
UBS announced that it will charge clients negative interest from July 2021 if cash balances exceed CHF 250’000. Many other banks have followed suit and are also charging negative interest on CHF and EUR cash
Fed installs Backstop for Corporate Bonds
Last Week, the Fed announced that it is going to buy single corporate bonds to ensure a functioning secondary corporate bond market, which is a historical move and a positive sign for a market that
Media Coverage
Alpinum Investment Management features in investment management and finance media. From features on our award-winning investment management solutions, to topical inverviews with our Senior Portfolio Managers. See below for highlights of Alpinum Investment Management in the news.
Weshalb sich Aktienanleger beim S&P 500 auf weniger Rendite einstellen müssen | Cash.ch
Der S&P 500 feiert Rekordstände und der Markt strotzt nur so vor guten Prognosen für den amerikanischen Auswahlindex. Der Schweizer Vermögensverwalter Alpinum sieht die Chancen auf hohe Renditen aber schwinden. Von wegen “lahmer” August: Der
Alex Hinder will es nochmals wissen | finews.ch
Alex Hinder, ein Schweizer Pionier im Bereich passiver Anlageprodukte, hatte im vergangenen April seinen Rückzug aus dem operativen Geschäft angekündigt. Nun hat er doch ein neues, aktives Amt übernommen, wie Recherchen von finews.ch zeigen. Anfang Juli 2021
Negativzinsen | Tagesanzeiger
Die UBS hat angekündigt, dass sie ab Juli 2021 Negativzinsen von -0.75 Prozent p.a. auf Bargeldguthaben über CHF 250’000.- erheben wird. Die Post Finance belastet ihren Kunden bereits heute ab einem Guthaben von CHF 100’000.-
Quarterly Investment Letters
Q2 2022-Quarterly Investment Letter
Inflation pressure is mounting and we deal with a mature business cycle with the risk of entering into a period of stagflation. In the short-term, economic downside risks are rising. Central banks weigh price stability over economic growth concerns and have started a new hiking cycle. A vicious wage-price inflation spiral is possible. Geopolitical escalation is a human tragedy. Moreover,
Q1 2022-Quarterly Investment Letter
Central banks will likely remain cautious about tightening too quickly and global GDP growth is expected to reach 4.4% in 2022. While the new Omicron variant is highly contagious and should delay the recovery process in certain sectors, it is unlikely to derail the global economy. In the US the case for spending remains intact and GDP growth is expected
Q4 2021 – Quarterly Investment Letter
Global GDP growth is reaching peak levels and inflationary pressures are building. After outstanding returns in equities and bonds, investors will have to adjust their long-term return expectations if the principle of “mean reversion” holds true. The US is the first major developed economy with GDP returning to pre-pandemic levels. Although consumer sentiment has dipped, the “wealth effect” from rising
Q3 2021 – Quarterly Investment Letter
Governments and central banks remain commit-ted to generous stimulus measures. This in combination with consumer pent-up demand and a strong wave of capital expenditures form a robust backdrop for the global economy. GDP growth in the US is particularly strong and the service sector recovery is now driving the rebound and labor market recovery. The US Fed’s ultimate goal is
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Investment Blog Archive
Alpinum Alternative Investment Strategy – Downside Resilience
The markets are anything but calm at the moment, and this applies to all asset classes. We are feeling comfortable in this environment right now, as our absolute return philosophy and draw down risk management
Short Term High Yield Rates are attractive again @ 7% p.a.
Yields of US short term low grade bonds broke through the 10-years average of 5.7% and reached a level slightly above 7% in early May. The yield curve steepening by more than 200 bps over
Short Term High Yield Rates are attractive again @ 7% p.a.
Yields of US short term low grade bonds broke through the 10-years average of 5.7% and reached a level of 6.9%. Since the Fed signalled a faster pace of interest rate increases in the coming
Yield curve inversion signals economic weakness ahead of us
In macro-finance, it is well known that an inverted yield curve is signalling a recession or at the very minimum, it is indicating that the economy is operating in a late cycle. For example, the
Yield curve inversion signals economic weakness ahead of us
In macro-finance, it is well known that an inverted yield curve is signaling a recession or at the very minimum, it is indicating that the economy is operating in a late cycle. For example, the
Q2 2022-Quarterly Investment Letter
Inflation pressure is mounting and we deal with a mature business cycle with the risk of entering into a period of stagflation. In the short-term, economic downside risks are rising. Central banks weigh price stability
EUR Swap rates soar and put pressure on short-term bonds
An interest rate swap is an agreement between two parties to exchange fixed and floating interest payments with each other over a specified period of time. At the time of the swap agreement, the total
Credit spreads spiked to August 2020 level in two weeks!
Within a matter of only two weeks, European High Yield spreads have jumped to a spread level of 480 bps, well above the last 5 years average of 366 bps and back at August 2020
Credit spreads spiked to August 2020 level in two weeks!
Within a matter of only two weeks, European High Yield spreads have jumped to a spread level of 480 bps, well above the last 5 years average of 366 bps and back at August 2020
Credit spreads widen most when economic cycle is mature
Looking back at the last rate hike cycle (2015-2018), credit spreads for both high yield and investment grade bonds (see blue line) were not immediately negatively affected when the Fed rates started to take off.
Credit spreads widen most when economic cycle is mature
Looking back at the last rate hike cycle (2015-2018), credit spreads for both high yield and investment grade bonds were not immediately negatively affected when the Fed rates started to take off. However, the more
Real rates reach record low levels of -6.8% in USD
Since the beginning of 2021, breakeven inflation has risen sharply, and has reached almost 3% at the end of October, while breakeven inflation has been relatively steady at Investors have somehow learnt to deal with
Real rates reach record low levels of -6.8% in USD
Investors have somehow learnt to deal with low or negative nominal yields. But now, as real yields fell to record low levels such as -6.8% in the example for short-term real rates, bond investors need
Hedge Funds Review & Outlook
Hedge funds delivered a solid positive performance in 2021, covering all sub-strategies. In our working paper “Investment Insight – Hedge Funds”, we shed light on 2021 from a hedge fund perspective, explaining in- and outflows
Q1 2022-Quarterly Investment Letter
Central banks will likely remain cautious about tightening too quickly and global GDP growth is expected to reach 4.4% in 2022. While the new Omicron variant is highly contagious and should delay the recovery process
Change in Fed funds futures imply a sooner rate hike
The hawkish tone of Powell’s remarks on November 30 surprised the market and the yield curve flattened significantly as a consequence. While long term rates retreated considerably, the Fed funds futures imply a sooner Fed
Is inflation about to peak?
Since the beginning of 2021, breakeven inflation has risen sharply, and has reached almost 3% at the end of October, while breakeven inflation has been relatively steady at around 2% over the past decade. Despite
Is inflation about to peak?
Since the beginning of 2021, breakeven inflation has risen sharply, and has reached almost 3% at the end of October, leading to a breakout in short term nominal yields and a bear flattening of the
Loans performed well, while high yield faced some headwinds
Leveraged loans continued to perform well during the recent risk-off mode and upmove in interest rates, while US high yield bonds were negatively affected. The floating rate feature in leveraged loans offers a clear advantage
Loans performed well, while HY bonds faced some headwinds
Leveraged loans held steady during the risk-off mode in the 2nd half of September. While US high yield bonds were negatively affected by higher trending interest rates and falling equity markets, leveraged loans benefitted from
Q4 2021 – Quarterly Investment Letter
Global GDP growth is reaching peak levels and inflationary pressures are building. After outstanding returns in equities and bonds, investors will have to adjust their long-term return expectations if the principle of “mean reversion” holds
Average down – future equity returns will be lower
While high quality bonds with close to zero yields haven’t offered a feasible investment opportunity since a long time, equities rallied over the last 18 months. However, equities trade now at elevated levels in a
Weshalb sich Aktienanleger beim S&P 500 auf weniger Rendite einstellen müssen | Cash.ch
Der S&P 500 feiert Rekordstände und der Markt strotzt nur so vor guten Prognosen für den amerikanischen Auswahlindex. Der Schweizer Vermögensverwalter Alpinum sieht die Chancen auf hohe Renditen aber schwinden. Von wegen “lahmer” August: Der
Long-term equity return expectations
The term “mean reversion” assumes that numbers will tend to converge or normalize to the long-term average over time. In economics mean reversion is often referred to GDP growth, interest rates and inflation. In finance
Opportunities in Asian high yield bonds
The Chinese government’s direct interference be it in on education stocks, be it on tech stocks or IPOs (ANT IPO) is a demonstration of power by the authorities and that they are serious about their
No Fed Fund Rate increase anytime soon
The Treasury yields fell substantially in July, especially at the long end of the curve. Moreover, current Fed fund future prices point to a more moderate pace of rate hikes, as the chart illustrates. It
Credit risk premium at major resistance level
The option adjusted spread (OAS) over US Treasuries for B rated US high yield bonds has recently hit its major historical resistance level of 290bps (currently 341bps). In other words, the credit risk premium has
High expectations for US tech stocks
Within the S&P 500 index, the technology sector makes up 27% of the index, reached a price/sales ratio of 7.5x and has become more expensive than it ever was during the dot-com era. Valuations are
Biggest perceived market tail risks
The Bank of America’s most recent Global Fund Manager Survey shows that the biggest perceived market tail risks are in inflation (29%) and a “taper tantrum” (26%). On sector level the survey shows that fund
Alex Hinder will es nochmals wissen | finews.ch
Alex Hinder, ein Schweizer Pionier im Bereich passiver Anlageprodukte, hatte im vergangenen April seinen Rückzug aus dem operativen Geschäft angekündigt. Nun hat er doch ein neues, aktives Amt übernommen, wie Recherchen von finews.ch zeigen. Anfang Juli 2021
CLOs offer an attractive premium
CLOs (collateralized loan obligations) have always offered an attractive premium to bond or loan spreads, but investors continue to overlook the asset class due to their complexity and as they tend to be less liquid
BB CLOs 7.4% vs US HY bonds 3.0%
CLOs have always offered an attractive premium to bond or loan spreads, but investors continue to overlook the asset class due to their complexity and as they tend to be less liquid during market stress
Q3 2021 – Quarterly Investment Letter
Governments and central banks remain commit-ted to generous stimulus measures. This in combination with consumer pent-up demand and a strong wave of capital expenditures form a robust backdrop for the global economy. GDP growth in
Catalysts needed to keep equity rally
Governments and central banks around the world remain committed to generous fiscal stimulus measures and keeping the cost of capital at historic lows. This combination is about to initiate a new investment cycle as companies
Negativzinsen | Tagesanzeiger
Die UBS hat angekündigt, dass sie ab Juli 2021 Negativzinsen von -0.75 Prozent p.a. auf Bargeldguthaben über CHF 250’000.- erheben wird. Die Post Finance belastet ihren Kunden bereits heute ab einem Guthaben von CHF 100’000.-
The Global Composite PMI at a 15-year high
The Global Composite PMI has reached a 15-year high of 58.4 and after a decade of worries about inadequate demand and spending power in the aftermath of the global financial crisis, the shortage of supply
Interest rate volatility calmed down
The steepening of the US Treasury bond yield curve increased the volatility of interest rates overall. This is well illustrated by the MOVE index, an indicator that measures interest rate volatility using the implied volatility
Cash Plus Solution
UBS announced that it will charge clients negative interest from July 2021 if cash balances exceed CHF 250’000. Many other banks have followed suit and are also charging negative interest on CHF and EUR cash
The new normal
Economies typically normalize again after bust/boom periods with inflation at marginally higher levels. The US is about to reach peak GDP growth levels, due to unprecedented monetary and fiscal stimulus measures. While the real economy
Loan Rating upgrades & downgrades
During 2020, 45% (USD 521 bn) of the loan market by par amount had received a rating downgrade from a total market size of USD 1.2 tn. However, the flood of corporate downgrades has ebbed
Sherman ratio -interest risk measure
Year-over-year, the Barclays Global Corporate Investment Grade Bond index (Global Corp IG) has returned +8.3% (duration 7.2 / yield-to-worst 1.7%). The Sherman ratio is an interest rate risk measure and represents the yield per unit
Income Returns have descreased
Income returns have decreased by almost 70% for European investment grade bonds and by around 50% for European high yield bonds over 2007 to 2020. European loans, however, have been much less affected as the
Rating downgrade cycle has stopped
In 2020, the rating agencies acted as quickly as never before in downgrading the issuer ratings due to the COVID-19 pandemic – very different to 2007/08, when rating agencies were criticized for acting too slowly.
Duration heavy IG bonds tanked
In anticipation of a strong economic recovery ahead of us, long term interest rates have spiked from their historical lowest levels This has paid its toll For example, US investment grade bonds suffered a performance
Long-term interest rates have spiked
Long-term interest rates have spiked from historical low levels in anticipation of a strong recovery. With the US ISM Services PMI surging to an all-time high of 63.7 points (previous month 55.3), US long-term interest
40ft container Shanghai to New York
Chinese producer price inflation (PPI) accelerated from 0.3% year-over-year (yoy) in January 2021 to 1.7% yoy in February 2021. For March, an advance PPI inflation tracker points to an increase of 5% yoy. Global price
Q2 2021-Quarterly Investment Letter
The world is reaching an inflection point in defeating the pandemic, resulting in a possible regime change in inflation, a steepening of the yield curve, equity sector rotation and possibly a revival of commodity prices.
US treasury yields have risen
US treasury yields have risen from 0.8% end of 2020 to currently 1.7% and bond investors have suffered painful losses on their long-duration bonds (up to -5% ytd). Senior secured loans are valued with a
Global reflation
Global reflation continues and inflationary pressures are building. From semiconductor chips to copper, demand is on the rise while capacity remains constrained. While Western governments have largely maintained consumer income, investments into production capacity is
10yr US Treasury yields rose 60 bps
Since December 2020, 10yr US Treasury yields rose 60 bps, while expected inflation remained flat at ~2.2%. Inflation (i.e. measured by “PCE” = Price Consumer Expenditures) will likely pick up significantly from current levels of
Real rates increased while expected inflation did not (yet) move
Since December 2020 US long term nominal yields (US Treasury 10y) rose 60 bps, while expected inflation (US Inflation Swap 5y5y) remained flat at ~2.2% Markets incorporate a benign outlook, but inflation will pick up significantly over
US consumer spending
US consumer spending is the engine of economic growth and is close to 70% of GDP. According to a recent survey by the Harris Poll, 71% of Americans say they miss socializing in restaurants and
US bond market
The US bond market has seen the 2yr/10yr US treasury yield curve steepening. The steepening is justified by the cyclical rebound, pent-up demand and higher inflation. Should inflation surprise on the upside and long-term yields
SPACs acquisition companies
SPACs are special purpose acquisition companies designed to enable their managers to have funds available to make acquisitions quickly and on an opportunistic basis. Thanks to their asymmetric return profile, SPACs popularity has shot up
Europe’s cyclical/defensive stock ratio
Compared to the US, trade and manufacturing make up a larger share in the European economy and Europe’s cyclical/defensive stock ratio is a good indicator for the global industrial cycle and the direction of US
Government Bonds slide
Year-to-date long-term government bonds have slid across the world, reflecting investors’ expectations of an economic recovery. The US Treasury 7-10yr total return index is down -1.7% ytd (current yield 1.18%), while the German Sovereign 7-10yr
What inflation level will be accepted by the FED?
Since September 2020, the FED’s policy allows for a period of inflation over their 2% target: “[…]the Committee will aim to achieve inflation moderately above 2 percent for some time[…]”, which is indicating that they
Inflation
Inflation remains a distant threat as both the output and unemployment gap will remain meaningful in 2021. That said, year-over-year inflation rates will temporarily jump as numbers were extremely depressed at the nadir of the
Economic Stimulus
No central bank and no government wants to remove economic support too quickly and there is plenty of economic stimulus for companies profit margin to recover over the coming months. This is thanks to the
US short-term rates don’t move, but curve set to steepen
With the arrival of the pandemic crisis, the FED had cut rates aggressively close to zero. In addition, it had announced an adaption of its interest rate policy towards an “average inflation targeting” and that it will keep
Q1 2021-Quarterly Investment Letter
Investors seem to be living in the best of all worlds. No central bank or government wants to remove economic support too quickly and monetary policy will remain very stimulative. Joe Biden won the US
Europe is back in partial lockdown
Europe is back in partial lockdown and economic volatility is expected to be higher beginning of 2021. At the same time, the European Central bank continues to press on the gas pedal and Eurozone money
Investment Grade credit tightened
Investment grade (IG) bond credit spreads have further tightened and have reached almost pre-Covid levels. The upside of IG bonds is limited taking into account their embedded “duration” feature. In comparison, spread levels in the
Credit spreads almost at pre-Covid levels
During the market rally in November, credit spreads have further tightened and reached almost pre-Covid levels in the investment-grade category, whereas spread levels are still wider in the high-yield market. OAS of broad US investment-grade
Rating downgrade slowed down
Year-to-date US high yield corporate rating downgrades accumulated to more than 475 – even surpassing the previous crisis in 2008. The up-/downgrade ratio (proportion of upgrades among total rating actions of Moody’s and S&P) marked
Central banks purchased 6 tln debt
In the first half of 2020, major central banks purchased USD 6 trillion in public and private sector debt. In comparison, the same central banks spent USD 1.5 trillion on quantitative easing measures after the
Q4 2020-Quarterly Investment Letter
Over the next 3-6 months we expect global economic growth to be reasonable, based on the outlook for a viable vaccine, central banks’ ultra-loose monetary policy and governments’ fiscal stimulus measures reaching over USD 13
Fed installs Backstop for Corporate Bonds
Last Week, the Fed announced that it is going to buy single corporate bonds to ensure a functioning secondary corporate bond market, which is a historical move and a positive sign for a market that
Zeit für selektive Kreditinvestitionen | finews.ch
Mitte Juni 2020 kündigte die US-Notenbank an, nebst Anleihen-ETF’s auch ausgewählte Obligationen zu kaufen, um einen funktionierenden Markt für Unternehmensanleihen zu gewährleisten. Dies ist ein historischer Schritt und ein positives Zeichen für einen Markt, der
Vermögensverwalter erwarten U-förmige Erholung – aber ohne Trump | finews.ch
Die unabhängigen Vermögensverwalter in der Schweiz befürchten die Folgen einer zweiten Corona-Welle und rechnen damit, dass Donald Trump die nächsten US-Präsidentschaftswahlen verliert. Exakt 44 Prozent der unabhängigen Vermögensverwalter in der Schweiz gehen davon aus, dass
Central banks unprecedented influence on capital markets
Central banks unprecedented influence on capital markets and their coordination with central governments will put a backstop on the economy in the US and Europe. Rating agencies have started to revise downwards their projections for
Q3 2020 – Quarterly Investment Letter
The Covid-19 pandemic has led to drastic actions around the world. Never before in history has it been so easy for Western governments to increase fiscal expenditures through debt. All of this supported by central
Alpinum Investment Management baut Zürcher Team aus | finews.ch
Ein Fachmann im Bereich Alternative Investments wechselt zur Zürcher Finanzboutique Alpinum Investment Management und übernimmt dort die Rolle als Head Business Development und Investor Relations. Der langjährige Experte im Alternative-Investment-Bereich, Peter J. Hegglin, wechselt zu
Q2 2020-Quarterly Investment Letter
With a global recession now a certainty, government bond yields remain very low and offer no long-term investment perspective, but help diversifying the portfolio as of now. Credit spreads in some market segments have reached extreme levels and led
Boredom is King | cash.ch
Heinz Rüttimann, Senior Portfolio Manager with a current assessment of corporate bonds and the corona crisis. Since 23 February, the stock markets have tended to know only one direction: downwards, due to the global spread
US Fed interest rate cut by 50bps
In a surprise move, the US Fed cut interest rates by 50bps to the 1-1.25% range. At the same time, the yield on the 10-year US Treasury note fell below 1% for the first time
We are creative an go beyond the obvious | Finews Asia
Investors tend to extrapolate historical returns into the future, and this is something that will not work in the current climate, Reto Ineichen, CEO of Alpinum Investment Management, says in an interview. External Link: Finews
COVID-19 – Hong Kong Tourism
The Hong Kong Tourism Board November 2019 number for visitor arrivals to Hong Kong dropped to 2.6 million. This is close to half of the long-term average since 2011 of 4.65 million arrivals per month.
Contingent Convertibles (CoCos)
Yields on US and European contingent convertible bonds (CoCo) have dropped to 4.2% and 2.7%, respectively, and option adjusted spreads (OAS) are below -1.8 standard deviations for both segments. Investors are flocking to the deeply
S&P 500 – over 200-day moving average
The S&P 500 index is trading at the highest level over its 200-day moving average since 2000. Various technicals for the S&P 500 are extended, begging the question on how long the rally can last.
Search for yield continues
The search for yield continues and the spread between the Barclays B rated US High Yield index and US treasuries narrowed to just 300 bps or a yield to worst of 4.9%. This is the
Wipe out Investor’s yield
The duration of the Barclays Global Corporate Investment Grade Bond index has increased from 5.9 end of 2013 to 6.9 end of 2019. During the same time period, the yield-to-worst fell from 2.9% to 2.2%
Q1 2020-Quarterly Investment Letter
Global manufacturing is likely to see a moderate rebound over the next 3-6 months. Hence, a near term recession is highly unlikely. US GDP growth decelerates in 2020. However, consumer spending, driven by low inflation,
Narrowing yield premium: Greece vs. Italy
The yield premium between Greek 10yr government bonds (1.4%) and Italian 10yr government bonds (1.2%) has not been that narrow since 2009. This despite the fact, that Greece is a non-investment grade country with a
Asian USD High Yield Corporate Bonds
The yield spread among Asian USD high yield corporate bonds (7.3% yield) and US high yield corporate bonds (5.6% yield) remains attractive at 170bps. If the US and China manage to agree on a “phase-one”
US Export numbers weaken
While business sentiment and export numbers are weakening, the consumer is in good health and remains the backbone of the US economy. Personal consumption advanced by +2.9% (Q3 annualized) and helped to prop up US
US/China Trade War
Market nervousness regarding the US/China trade war may have reached a temporary peak and has calmed down. At the same time, the yield spread between Asian USD High Yield Corporate Bonds (yield-to-worst 7.7%) and Global
S&P Global Credit Rating
S&P Global Credit Ratings continue to deteriorate and Q3 2019 saw 164 downgrades versus 64 upgrades. This is the lowest ratio (0.39) since 2015 with the majority of the cuts being applied to the high-yield
Q4 2019-Quarterly Investment Letter
Global growth is receding but (US) consumer confidence remains strong and as long as corporates’ capital expenditures do not further deteriorate, the likelihood for a near-term recession in the US or China is low. US
New Mandate for swisspartners-CEO | finews.ch
Zurich-based Alpinum Investment Management, the asset manager of the Swiss Marcuard Heritage Group, is expanding its Board of Directors with Markus Wintsch, CEO of Swisspartners Group. External Link: finews (German) Meet the Alpinum Investment Management Team.
30-year German bond yielding -0.11%
Germany has the world’s first 30-year bond priced with a yield of -0.11%. In fact, Germany’s whole yield curve is now below 0%, meaning that the government is effectively being paid to borrow out to
German 10-year bond yield
Germany’s 10yr bond yield is about to fall below the European Central Bank’s deposit rate as speculation abounds that more policy easing may be coming. The negative yield environment has accentuated even more and forces
Q3 2019-Quarterly Investment Letter
The US Fed is the dog that wags the tail. US Treasury futures forecast two rate cuts this year, which will prolong the economic cycle and prevent the USD from further strengthening. US GDP growth
USD Index
Technically the USD index (DXY) has broken through its 200-day moving average. Expected US Fed rate cuts for the rest of the year and signs of slower growth ahead should begin to erode the US
Direct Lending – Performance Analysis
Direct lending returns have historically been driven by consistent double-digit income returns, with a range between 10% and 12%. The slow decline in credit spreads within the CDLI over the last several years is a
ECB more easing
The European Central Bank is prepared for more easing and the search for yield has become even more pressing. Whether right or wrong but 5yr Greek government bonds yield now less than 5yr Italian government
S&P 500 stocks yielding more than 10yr US Treasury bonds
According to FactSet, 44% of S&P 500 stocks yield again more than 10yr US Treasury bonds at 2.14%. Investors have little choice to go elsewhere and stocks should find marginal buyers again.
How can “reasonable” returns – low or negative interest rates? | Tagesanzeiger
Over the past 30 years, the bond markets have benefited from a historically strong bull market, as falling interest rates have led to rising bond prices. After the last interest rate slide we have seen
Secured Lending – Insight
In einer Serie von Fachartikeln thematisieren und präsentieren wir Investment Opportunitäten, welche aktiv als Bausteine in unseren Absolute Return Portfolios eingesetzt werden. Bislang haben wir die folgenden Themen vorgestellt: “Structured Credit”, “Direct Lending” und Anlagen
Q2 2019 – Quarterly Investment Letter
The US Fed and the European Central Bank kick the can further down the road and keep interest rates lower for longer. US GDP growth continues to slow but a sudden recession is not on
Q1 2019 – Quarterly Investment Letter
Slowing economic growth in the U.S. and Europe is a fact. We admit the risk, that the current sharp market sell-off could front-run the real economy and increase the speed of an economic softening. The
Fed will refrain from interest rate cuts in 2019 | cash.ch
Investment expert Heinz Rüttimann does not believe that the US Federal Reserve will raise interest rates further in 2019. In the cash stock market talk, he discusses fears of recession and tells investors what they
Q4 2018 – Quarterly Investment Letter
Within the next 6 to 9 months we do not expect a recession in the US nor Europe. Growth in the US is primarily driven by personal consumption and European growth rates have become more
Beyond the low-rate doldrums | Citywire
Bond markets have benefited hugely from the bull market of the past 30 years, as falling interest rates have led to a rise in bond prices. Since the US has entered a rising rates environment,
Alpinum Investment Management hires market strategist from Julius Baer | finews.ch
Promote health. Save lives. Serve the vulnerable. Visit who.intSince the beginning of September 2018, Heinz Rüttimann has been strengthening the team of Zurich-based asset manager Alpinum Investment Management. He is active as a senior portfolio
Secured Lending – attractive returns | finews.ch
Low-interest rates and highly valued equities pose challenges for investors. Reto Ineichen and Christoph Beck of Alpinum Investment Management nevertheless see potential in niche strategies. External Link: finews (German) Read more on Secured Lending.
Q3 2018 – Quarterly Investment Letter
We do not expect a recession in the U.S. and in Europe for the next 6 to 9 months. U.S. tax cuts and increased government spending will keep the U.S. economy relatively strong. Chinese growth
Q2 2018 – Quarterly Investment Letter
The first months of 2018 experienced a fast comeback of volatility. Almost all traditional asset classes performed negatively in Q1-2018, putting alternative strategies back in the spotlight to diversify and optimize future performance expectations. Economic
Secured Lending backed by an asset
Generally, a “secured” loan is backed (or secured) by an asset. Hence, the borrower pledges an asset (i.e. in our example a property), as collateral in favour of the loan. In the event that the
Q1 2018 – Quarterly Investment Letter
Global growth momentum to accelerate and to slightly surpass pace of 2017 of 3.6% (estimate) GDP growth. U.S. tax cuts might add up to 0.5% of U.S. GDP growth. China’s GDP growth is expected to
Q4 2017 – Quarterly Investment Letter
Continued global growth recovery while inflation remains surprisingly low. Equity markets are still leading the way in an environment where all risky assets have done very well since the beginning of the year. Investment Grade
Indian local bonds offer attractive Yields
Most recently, the real yields (nominal 5-year government bond yield adjusted for inflation) in Indian bonds have exceeded the threshold of 5%. While we believe this elevated level will be only temporary, we still expect
Q3 2017 – Quarterly Investment Letter
Global growth is set for a moderate rebound, both in developed and emerging economies. Risks to global growth are linked to China, where financial bubbles are forming, and to geopolitics, where North Korea is the
Q2 2017 – Quarterly Investment Letter
The first four months of the year were very positive for risky assets as investors focused on the positive impacts resulting from the U.S. upcoming pro-growth policies. Global equities posted a gain of +7.9% during
Q1 2017 – Quarterly Investment Letter
We are witnessing the transition from monetary stimulus to fiscal stimulus (tax cuts, infrastructure spending) and from disinflation to relation. The rise of populism in the Developed Markets is finally forcing governments to adopt more pro-growth
Direct Lending – a growing Asset Class
In a world of historical low interest rates and (very) high debt burdens combined with an economic outlook that foresees only moderate global GDP growth, it is a fair assumption that structural inflation pressure should
Q4 2016 – Quarterly Investment Letter
Markets showed high levels of complacency brushing aside the negative Brexit vote consequences as all risky assets quickly recouped their losses. Global growth has softened but shows signs of stabilization. US elections dominate market sentiment
Q3 2016 – Quarterly Investment Letter
Global growth will only be moderately affected by Brexit. In Europe, where there will be months of uncertainty affecting business and consumer sentiment, we expect a larger impact. Interest rate levels of government bonds have
Alfred Strebel Is Back in Business | finews.ch
Two years after leaving his job at Fidelity Switzerland, Alfred Strebel is back in business. He has been appointed to the board of a prominent Zurich-based asset manager. Alfred Strebel was named a member of
Q2 2016 – Quarterly Investment Letter
Within the first 2 months of the year, there was a self-feeding panic about the global economy slowing down and a potential recession looming in the US. The equity markets were down severely (S&P500 –13%
Q1 2016 – Quarterly Investment Letter
Ignoring unpredictable exogenous shocks, we expect that economic growth will be positive but moderate. Although market sentiment is negatively biased we do not see the typical signals of an impending recession. For instance there is
Q4 2015 – Quarterly Investment Letter
As stated in the previous letter, global growth remains heavily affected by the antagonistic forces of deflationary impulses (energy, commodities), announced monetary tightening (the Fed and Bank of England) and continued monetary stimulus (ECB, Bank
Q2 2015 – Quarterly Investment Letter
Global growth is happening but it remains sluggish. The economic impact of the gigantic QE measures, at global level, remain underwhelming. Please note that in Q1 2015 alone, more than 20 central banks lowered their
Q1 2015 – Quarterly Investment Letter
Finally, the US will be in the lead to promote economic growth. The majority of other countries are lagging behind. This economic mismatch brings the synchronicity of expansive monetary policies amongst the big players to
Q4 2014 – Quarterly Investment Letter
The key instrument to fix the current financial and economic crises is global growth. The hopes projected into the recovery of the economy were dented in September due to somewhat U.S. weak data. We believe,