Insight Investment’s Post

A £1bn DB scheme could generate a surplus of £116m over 10 years if invested in gilts and investment grade corporate bonds. This is the projected surplus Insight calculates based on default rates consistent with historical median levels. Read more on how DB schemes could safely grow scheme surpluses here: https://bit.ly/4bACB0d Capital at risk. For professional investors only.

Our Global Macro Research hub holds Insight’s long-term thinking on markets and investing for clients and consultants. The hub provides an easily accessible library of papers that can be bookmarked for future reference using this link: https://bit.ly/3UtAndn Capital at risk. For professional investors only.

US municipal bonds offer a comparable yield to investment grade corporate bonds, but better credit quality and a lower default experience. Learn more about these differences here: https://bit.ly/4cDCtxD Capital at risk. For professional investors only.

Some credit yields are now in excess of typical discount rates used by LGPS funds to value liabilities. April LaRusse of Insight makes the case for why now is a good time to lock in those yields. Among the benefits are greater certainty of outcome and a positive outlook for credit. For more information on how LGPS funds can protect their surplus, click here: https://bit.ly/3RTZi8m Capital at risk. For professional investors only.

Which offers better relative value: global corporate bonds or global credit? The latter currently looks appealing as the yield spread of global corporates over credit has narrowed towards the lower end of its historical range. Learn more about the advantages of global credit here: https://bit.ly/3W1tmS2 Capital at risk. For professional investors only.

Traditional currency hedging trades risk for cashflow volatility. A dynamic approach attempts to solve these problems in three ways: efficient cashflow management, the potential to generate returns and increased diversification. Read why in our paper: https://bit.ly/3V7e7EJ Capital at risk. For professional investors only.

A 25% depreciation in sterling over the past 10 years has resulted in notable gains on the overseas holdings in LGPS funds. Given that sterling now offers good value these gains are at risk. Watch Francesca Fornasari of Insight explain how flexible currency hedging could help. For more information on how LGPS funds can protect their surplus, click here: https://bit.ly/3RTZi8m Capital at risk. For professional investors only.

The issuance of joint EU debt appears to have been a huge success. Southern European countries are the key beneficiary and have experienced economic outperformance as a result – find out why here: https://bit.ly/4aOB4D3 Capital at risk. For professional investors only.

Corporate sponsors may be in a position to benefit from their existing DB pension scheme. Many companies now find that their pension schemes already have more capital than required to afford pension benefits with a high degree of certainty. Our new paper explains why. Read more here: https://bit.ly/3VrjRdd Capital at risk. For professional investors only.

Why have defaults for high yields fallen over 2023 and 2024? Troubled high yield issuers have accessed capital from the private debt market, so they make up a smaller part of the high yield market. Find out more on why we expect annual default rates to stay within a range of 2-3% for Europe and the US: https://bit.ly/3L8G6zH Capital at risk. For professional investors only.