- Fixed income assets are offering competitive yields
- Sustainable investments are still in the spotlight
- Investment themes like cybersecurity, safety and wellness are increasingly relevant
As the global economy grapples with rising interest rates, banking crises and persistent inflation, investors are on the hunt for both short and long-term strategies to shield their portfolios from market volatility. In these uncertain times, selecting the right investment strategy is more critical than ever, says Natixis Investment Managers (Natixis IM), a US$1.2 trillion (S$1.6 trillion) asset manager1.
Says Dora Seow, chief executive officer of Natixis IM Singapore: “Against a changing market backdrop, clients need diverse investment ideas. With inflation and rates rising, fixed income is back in focus. But investors are also looking to tap into long-term growth trends.”
With a multi-affiliate approach, Natixis IM offers its clients a single point of access to over 15 specialised asset managers and delivers a diverse range of solutions ranging from fixed income to equities, alternatives as well as thematic and sustainable investing.
Opportunities in fixed income
With yields at levels not seen since before the 2007-2008 Global Financial Crisis, 2023 is shaping up to be one of the better years for fixed income investors. According to Loomis, Sayles & Company, an investment management firm and affiliate of Natixis IM, yields have risen above 5 per cent on portfolios of average investment grade quality2. That means investors do not have to take too much duration or credit risk to receive a good income.
“The QE (quantitative easing) years that were here for a while and were driving down yields are gone, and you don’t have to stretch so far to get what are very competitive returns,” says Matt Eagan, co-head of the full discretion team at Loomis, Sayles & Company.
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He notes that with strong fundamentals in place, investors can receive a competitive premium from investments in corporate bonds with BB and BBB-grade credit ratings, high-yield corporate bonds, as well as in the securitised space, mainly in the North American market. Opportunities are also emerging outside of the United States in emerging markets and the foreign global space in developed markets.
Global trends of sustainable investments
Sustainability has also been a key investment theme for some time now. Following a challenging 2022, Jens Peers, chief investment officer of investment manager Mirova US, predicts a renewed focus by investors on sustainable investments in the coming years.
Mirova, an affiliate of Natixis IM, is a 100-per-cent sustainability-driven asset management company that offers its clients investment solutions combining the search for financial performance with environmental and social impact.
Energy and energy security will continue to be key themes in 2023 and beyond, Peer predicts. Notable factors contributing to these trends are the growing desire for energy independence among Europeans and shifting global supply chains. These trends should offer a strong tailwind to renewable energy, energy storage, and energy efficiency.
Other sustainability trends are emerging in biodiversity and food systems. "We see the focus on these themes strengthening, driven by the increasing impact of Gen Z and awareness of the impact our food systems and human activities have on climate and biodiversity", says Peers.
Long-term themes shaping the future
Meanwhile, with the world experiencing unprecedented shifts, investors can focus on secular growth themes like technology, demographics, globalisation, and resource scarcity to tap into structural transformations.
Thematics Asset Management, another affiliate of Natixis IM, is an equity investment firm specialising in innovative thematic strategies that focuses on five key themes: AI and Robotics, Safety, Subscription Economy, Water and Wellness. There’s also a multi-thematic solution (Meta) that includes all equity investments of the five themes.
“We constantly look for secular growth themes in the economy and stay highly focused. We launched our first thematic strategy in 2018 and have developed other strategies since then. We also have a Meta strategy as a diverse, all-in-one solution,” says Mohammed Amor, chief executive officer at Thematics Asset Management.
Thematic equity has been a way to bring diversification to portfolios. It has been gaining importance as an asset allocation strategy in the past few years, especially as investors are keen to look beyond traditional investments and tap into long-term innovations.
Taking an expert approach to investment expertise
With more than US$1.2 trillion1 (S$1.6 trillion) in assets under management, Natixis Investment Managers utilises a multi-affiliate approach to offer its clients a single point of access to the specialised expertise of over 15 active managers.
The firm provides a diverse range of solutions across asset classes, styles, and vehicles, incorporating cutting-edge environmental, social, and governance (ESG) strategies and products that promote sustainable finance.
Footnotes
1 Source: Natixis Investment Managers. Assets under management (“AUM”) of affiliated entities measured as of March 31, 2023 are US$1,208.2 billion. AUM, as reported, may include notional assets, assets serviced, gross assets, assets of minority-owned affiliated entities and other types of non-regulatory AUM managed or serviced by firms affiliated with Natixis Investment Managers.
2 Source: Loomis, Salyes & Company as of February 17, 2023.
Disclaimers
This document is provided by Natixis Investment Managers Singapore Limited having office at 5 Shenton Way, #22-05/06, UIC Building, Singapore 068808 (Company Registration No. 199801044D). Mirova Division (Business Name Registration No.: 53431077W) and Ostrum Division (Business Name Registration No.: 53463468X) are part of NIM Singapore and are not separate legal entities. The content of this document is strictly confidential and has been prepared for informational purposes only and for the exclusive use of institutional and accredited/professional clients or prospects. Under no circumstance may a copy be shown, copied, transmitted or otherwise distributed to any person or entity other than the authorised recipient without the advance written consent of Natixis Investment Managers Singapore Limited.
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Past performance and any economic and market trends or forecast are not necessarily indicative of the future or likely performance. Certain information included in this document is based on information obtained from other sources considered reliable. However, Natixis Investment Managers Singapore Limited does not guarantee the accuracy of such information.
Natixis Investment Managers Singapore Limited is a business development unit of Natixis Investment Managers, the holding company of a diverse line-up of specialised investment management and distribution entities worldwide. The investment management subsidiaries of Natixis Investment Managers conduct any regulated activities only in and from the jurisdictions in which they are licensed or authorised. Their services and the products they manage are not available to all investors in all jurisdictions. It is the responsibility of each investment service provider to ensure that the offering or sale of fund shares or third-party investment services to its clients complies with the relevant national law.
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