Fixed income research
We have a specialised fixed interest team in Jersey, which provides information on direct investment into government, supra-national and corporate bonds. It also advises on the emphasis within fixed interest portfolios regarding the different types of bonds, whether index-linked, conventional, high grade or high yield corporate bonds. The maturity profile is also an important factor. We also have a fixed interest specialist analysing bond funds within the Fund Research team.
We apply our investment philosophy for government bonds by looking at yields to maturity for the relative value of the bond. News flow is identified as the change in interest rates and inflation and we also look at price momentum.
Corporate bonds add a further dimension where value is measured as yield to maturity versus government bonds of similar maturity and versus other corporate bonds of the same financial rating given by Standard & Poor’s, Moody’s or Fitch. News flow relates to movements in the fortunes of the underlying companies although equities and bonds do not necessarily respond to news in the same way. Announcements by the ratings agencies on changes in ratings, or changes in their outlook, are important for news flow.