LM Capital Group

With $13 trillion of investment grade corporate and government bonds having negative yields, fixed income investors are increasingly looking at higher yielding emerging market debt.

Pemex is a state-owned company that manages all of Mexico’s oil and gas sector. The majority of its oil fields are located onshore or in shallow waters, yielding low extraction costs. Yet the company is extremely inefficient and heavily indebted. Both production and proven reserves of oil are declining and the company consistently loses money.

Implementing the use of Environmental, Social and Governance (ESG) factors into the investment process presents different challenges for fixed income and equity investors.

Today’s fixed income investment environment can be especially negative for bond portfolios heavily weighted with core holdings such as Treasuries, agencies, MBS, and investment-grade corporate bonds—all of which are highly sensitive to rising interest rates and changing fiscal and monetary policy.

Should investors prefer an active investment fixed income investment management strategy over a passive fixed income investment strategy? LM Capital Group believes that actively managed fixed income investment management strategies may meaningfully impact investors’ portfolios in five ways.

Second quarter economic data continues to suggest that the US economy is still on track even as the labor market continues to provide no discernable increase in wage inflation. Economic data wavered slightly during the quarter but continues to demonstrate a stable overall environment amidst a perceived slowing in labor market trends and some downwardly revised GDP forecasts.