Investors are once again focusing on emerging markets credit risk given the recent high-profile ratings downgrades of China, Brazil, and South Africa. T
Although the situation in the bond market has become clearer, with the reduced political risk in Europe and the US Federal Reserve's relative openness about its intentions, investors should not ignore interest-rate risk, because bond yields are still extremely low, particularly in Europe. In the circumstances, active management is vital to protect portfolios against yields rising – even gradually – in the wake of US movements.
Over the last 18 months we’ve seen the beginning of a rally in value stocks, which have rebounded from 2015’s 20-year lows. In 2016, value stocks outperformed growth stocks by the widest margin in well over a decade.