Each week the Fixed Income team releases its views on macro strategies including duration, country, cross macro and currency, and sector strategies such as securitized debt, corporate credit and emerging markets debt. 

Each month the Fixed Income team releases an overview of recent developments in credit markets and key views within investment grade, high yield and leveraged loans.

GS CORE® Equities Portfolios Q&A with Gary Chropuvka, Co-Head of GSAM's Quantitative Investment Strategies team

Millennials Q&A with Jean-Christophe Labbé, Lead Portfolio Manager, GS Global Millennials Equity Portfolio

Each month the Fixed Income team releases an overview of recent developments in credit markets and key views within investment grade, high yield and leveraged loans.

Following a strong 2017, emerging market (EM) assets pulled back in 2018 as risk sentiment deteriorated amid headwinds from moderating global growth, domestic political risk and trade tensions. We believe investor concerns and repricing are overdone in light of the solid long-term fundamentals and more attractive valuations relative to developed market (DM) assets.

In this piece, we outline why we think late-2018 corporate credit weakness reflects a ‘false alarm’ in terms of indicating a turn in the cycle and why we believe corporate credit offers an attractive risk-reward profile.

China’s growth is moderating in the near-term... China’s economic growth is decelerating as a result of both near-term cyclical challenges and structural shifts.

Each month the Fixed Income team releases an overview of recent developments in credit markets and key views within investment grade, high yield and leveraged loans.

Our portfolio manager discusses what factors in the US economy may cause inflation to accelerate

Revolutionary technology may benefit financial services and supply chain

Trade tensions may affect China far more than the US

The US housing market is slowing and we expect that trend to continue in 2019, primarily due to declining affordability as house price appreciation has exceeded income growth.

Oliver Bunn, Portfolio Manager, GS Absolute Return Tracker Fund, and his team leverage their extensive knowledge and experience with hedge funds to provide a diverse universe of investments with the ART Fund.

Each month the Fixed Income team releases an overview of recent developments in credit markets and key views within investment grade, high yield and leveraged loans.

Shifting from an opportunistic to a proactive approach to creating value

Market and policymaker commentary has congregated around a unified narrative of the leveraged loan sector posing a “risk to financial stability”, as quoted in the most recent US Federal Reserve (Fed) meeting minutes.

From 2017 to earlier this year, Emerging Market (EM) equities had been bolstered by the consensus optimism on a strong and synchronized global growth.

Within our investment grade corporate strategy we are overweight European and US Bank issuers.

US Corporates delivered their strongest earnings season since 2010 over the second quarter.

Investors are increasingly attracted to portfolios that can generate positive impact alongside market rates of return, but the range of eligible investments can frequently look too narrow, or confined to less-liquid areas of the market. What if so-called impact investment opportunities were hiding in plain sight, among more ‘vanilla’ parts of a traditional investment portfolio? Enter: municipal bonds. We discuss this opportunity with the GSAM Municipal team’s senior portfolio manager Ben Barber and Michael Kashani, global head of ESG portfolio management within fixed income.

Our Fundamental Equity team regularly explores investment themes shaped by the Millennial generation. In Millennial GENEration the team discusses genetic technology as a potential disruptive force in the healthcare sector.

Against a nuanced macro and political backdrop – characterized by easing growth momentum, protectionist trade tendencies and monetary policy normalization – micro stories can be easily overlooked.

Rising trade tensions are creating a ripple through the global markets. GSAM’s portfolio managers discuss the implications.

Corporations Looking for Flexibility

In a Q&A, GSAM’s Fixed Income team outline the factors behind the recent weakness in EMD and why they think the longer-term outlook for EM remains positive.

In this Q&A, Sally, Rob, and Sean, portfolio managers of the GS US Smaller Cap Equity Portfolio, discuss the benefits of investing in US SMID equities and how the team manages the Portfolio.

Navigating Exchange-Traded Fund (ETF) capital markets can appear complicated without the right resources. From understanding ETF liquidity and transaction costs to general education and guidance, Goldman Sachs Asset Management (GSAM) is committed to helping our clients navigate the capital markets infrastructure within ETF trading and execution. This quick reference guide walks through key components of ETF capital markets and relevant trading practices.

US corporate defined benefit (DB) pension plan funded levels are at an important inflection point –the aggregate funded status of US DB plans is at its highest level since 2013 and close to its highest level since the 2008 financial crisis.

With the US Federal Reserve delivering the seventh rate hike of its tightening cycle this month, we favor exposure to shorter-duration assets.

GSAM’s portfolio managers discuss maintaining a pro-risk strategy and the importance of dynamic investing.

We highlight current demographic developments around the world, illuminate the complex relationship between demographics, inflation and asset prices, and present demography-based predictions for major economies, based on proprietary methodology.

We are underweight agency mortgage-backed securities (MBS) where we continue to expect the technical environment to deteriorate over time (Notes From the Desk, below). Within the sector, we prefer higher-coupon MBS.

We believe valuations offer an attractive entry point.

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Bottom line: A moderation in macro momentum and higher market volatility did not cloud first quarter corporate earnings; annual revenue and earnings per share (EPS) growth was 8% and 23%, respectively.

The increases in the effective federal funds rate and repo rates relative to IOER have called attention to the Fed’s balance sheet reduction.

Deceleration in activity indicators has been a key theme in markets in recent weeks. In the US, we do not think any dip in macro momentum will lead to the near-term-change in the US Federal Reserves’s (Fed) reaction function and we continue to expect three further rate hikes this year.

Gary Chropuvka, Co-Head of GSAM's Quantitative Investment Strategies team, explains how the team manages the GS CORE® Equity Portfolios, the funds’ key characteristics and the role of human judgment in the investment process.

We entered 2018 with a constructive view on European high yield (EHY) corporate credit, which encompasses both euro- and sterling-denominated bonds, due to solid fundamentals and momentum in the Euro area and global recovery, but our exposure was light given elevated valuations.

The Treasury released monthly TIC data on foreign holdings of US Treasury bills as of February 2018. Foreign holdings of US T-bills remained similar to January at 35%. The number of Treasury bills owned between prime and government money funds increased significantly in February due to increase in net issuance by the Treasury.

GSAM’s seventh annual Insurance Survey of 300 global insurance CIOs and CFOs revealed a return of skepticism regarding the investment opportunity set and a reversal in risk appetite from last year.

How fixed income ETFs can trade more efficiently than the underlying bonds they represent.

In this year’s Pension Review “First Take:” It Should Be Different This Time, we highlight key observations based on our analysis of the 50 largest US DB plans in the S&P 500, spanning topics from such areas as system-wide funded status, asset allocation and actuarial assumptions. 

The FOMC will meet this Wednesday and we expect the Fed to increase federal funds rate by 25bps.

Gary Chropuvka, co-head of GSAM's Quantitative Investment Strategies team, explains why Big Data and Machine Learning are critically relevant for investment management.

We are underweight agency mortgage-backed securities (MBS) where we continue to expect the technical environment to deteriorate over time (Notes From the Desk, below). Within the sector, we prefer higher-coupon MBS.

At Goldman Sachs Asset Management, we anticipate that Millennials will drive a wave of change and opportunities in the coming years. In a Q&A, Jean-Christophe Labbe, Lead Portfolio Manager of the GS Global Millennials Equity Portfolio, outlines how the Portfolio is designed to connect clients to these opportunities in a thoughtful way, with a focus on quality businesses at supportive valuations.

2018 has had an eventful start. In a live roundtable, our senior portfolio managers discussed global economic growth, hints of rising inflation and expected central bank rate hikes.

We are underweight agency mortgage-backed securities (MBS) where we continue to expect the technical environment to deteriorate over time (Notes From the Desk, below). Within the sector, we prefer higher-coupon MBS.

AAA-rated CLOs remain among the most attractive investments in the securitized space. Spreads have tightened up and down the capital structure on the year despite record gross issuance and net issuance levels that have been consistently positive for the past 6 years.

This Macro Insights follows up on the Outlook we released in July with a deep dive into the potential asset implications of the global QE retreat.

Finding value in fixed income can be a challenge in the current market environment. Read why we think relative value strategies offer compelling opportunities to find value in fixed income.

Hear our senior thought leaders discuss how inflation, reduced political uncertainty and the role of central banks will impact the remainder of 2017, and what this may mean for investors.

A shift to a low carbon economy where consumers prefer to spend online and on experiences and data rather than goods has potential to reshape existing industries and create new markets.

We highlight structural drivers – such as growth, trade and demographics – which support an investment allocation to EM’s rapidly growing but underappreciated corporate debt segment. 

GSAM discusses the timeline for implementation of the regulation, key provisions of the text for money market funds and the impact to investors.

In this Q&A, Ichiro Kosuge, Lead Portfolio Manager of the GS Japan Equity Partner Portfolio, outlines why he believes the current environment is the best it’s been for both active and growth investing in Japan for the last 25 years.

This month we check the barometer on inflation. We believe a gradual normalization of global price pressures is under way.

Four charts outline key observations and things investors should watch out for in the US, Europe, Japan and China. 

The saying ‘sell in May and go away’ refuses itself to go away.

The US is shedding excess capacity at a faster rate than most of its developed world peers, which supports our outlook for inflation to strengthen and sharpens our focus on the risk of rates volatility.

Time-series and cross-sectional analysis support our expectation for US wage growth to pick up in the near future.

We believe the balance of secular drivers over the next several years is inflationary, as a range of factors that have suppressed prices over the past decade are reaching inflection points. 

The weak transmission of growth to inflation in the developed world creates challenges for policymakers, raising the risks of a policy misstep. 

In this Global Equity Outlook, we explore some of the potential transmission mechanisms, headwinds, and mile posts signalling that optimism in equity markets is successfully transitioning into investor confidence.

In this Global Fixed Income Outlook, we discuss some areas in this broadly supportive macro environment where markets may be complacent, and inconsistencies that could find equilibrium in the coming months.

In this Energy Update, we take stock of the near-term supply and demand dynamics that support our constructive outlook for oil prices.

Shoqat Bunglawala, Head of Global Portfolio Solutions International at GSAM, discusses the benefits of a dynamic approach to asset allocation in the Spring edition of Professional Adviser.

In our view, the long-term case for owning EM equities – portfolio diversification and alpha potential – remains intact. In this piece, we discuss some of the key reasons we believe long-term investors, especially those trying to build up to a strategic weight in EM, should stay the course.

Against a backdrop of strengthening growth and a retreat from globalization, in this edition of the Macro Insights we share our views on the implications of a shifting regulatory landscape.

Our experts discuss the key challenges facing central banks in today’s environment.

For months we have favored equities over credit and credit over rates. This is predicated on an expectation of a broadening global growth, aided by expansionary policies and potential deregulation in the US, and undemanding valuations in equities relative to bonds.

Beyond the US we see a more nuanced regulatory landscape, shaped by the divergent domestic priorities of the largest developed- and developing markets. We compare the investment takeaways in Europe, where cross-border standards are being reset, and in China as the focus returns to reform.

In the short term, the expectation of less regulation is helping to build confidence in corporate America. But over a one- to three-year horizon the boost to growth could be meaningful, in combination with tax reform and infrastructure spending.

Our “Un-Making the Rules” roundtable participants chose these charts to illustrate the potential market implications of an easier regulatory environment in the US.

On November 8th 2016, Indian Prime Minister Narendra Modi announced de notification of INR 500 and INR 1,000 currency notes in an attempt to reduce corruption and circulation of unaccounted money (‘black money’) in the system.

We take a closer look at the benefits of public real estate, given the continued maturity of the REIT market in terms of size, liquidity and track record.

The new US president has pledged to overhaul US trade relationships, to deliver a better deal for the US economy and workers. We talked to Steve Barry for the Fundamental Equity team’s take on the implications for corporate America and equity investors.

Globalization has shaped our world, owing in large part to the expansion of cross-border trade. This Macro Insights explores the “Globalism to Populism” transition, and we've asked our investment professionals to share their views on the market and investment implications of evolving trade policy, as protectionism could reconfigure trade relationships globally and plot a new distribution of winners and losers.

A more protectionist stance among the world’s largest economies will have reverberations, and currency markets are arguably most exposed. We talked to Francesca Fornasari about the team’s outlook for the dollar and across emerging markets.

Policy uncertainty and increasing populism poses risks across global markets, but not necessarily a threat to global growth, says GSAM co-head of Global Portfolio Solutions, Neill Nuttall.

A risk-premia focused approach incorporating trade data can help determine fair value in currency markets, writes Stephan Kessler, Head of Research for the Alternative Investment Strategies team in GSAM’s Quantitative Investment Strategies platform.

What can trump the markets in 2017?

India’s Finance Minister Arun Jaitley presented the Union Budget on February 1st, 2017. This sought to outline the direction and pace of the government’s economic policies for the coming year.

We see five key return drivers for 2017.

Our Fundamental Equity Team examines the shifting macro environment and its complex implications for equity investors.

Our Global Fixed Income Team explores why recent developments may point to more opportunity for alpha generation in the coming months.

The GSAM Money Market Approved Credit List has been built and maintained for more than 35 years and has become a cornerstone for providing high-quality liquidity management solutions.

With the implementation of US Money Market Fund Reform in full effect, we evaluate the shifts that were observed – in flows, yields and spreads.

Ben Barber and Michael Kashani comment on the impact investing landscape for municipal bonds, and discuss how the GSAM Municipal team integrates ESG objectives into client portfolios.

Since November, there has been a lot of talk on the impact of the US election on emerging markets. In light of this, we had a conversation with Owi Ruivivar, senior portfolio manager on the Fixed Income Emerging Market Debt team at Goldman Sachs Asset Management, who provided us her insights on performance as well as her outlook for the asset class for 2017.

Andrew Alford discusses three potential reasons for investors’ limited adoption of Smart Beta equity strategies and concludes that allocations to Smart Beta portfolios will likely increase over time as investors continue to evaluate these strategies.

In a surprise move, the Indian government de-monetized INR 500 and INR 1,000 currency notes on Nov 8th 2016 in an attempt to reduce corruption and circulation of unaccounted or black money in the system. The move has been characterized as one of many steps aimed at curbing corruption and the black economy and furthering the government’s related desire of promoting digital banking and financial inclusion.

The Fundamental Equity team provides their views following the result of the US presidential election.

The Fixed Income team provides their views following the result of the US presidential election.

Global infrastructure is a growing asset class that may appeal to investors seeking attractive investment attributes including a high yield relative to many other asset classes, fairly predictable cash flow growth and portfolio diversification. Learn about the characteristics of the asset class and key considerations for investors.

The challenging backdrop of deficient monsoons in 2014 and 2015 has posed a headwind to the rural economy in the past two years.

We discuss how a borrow-to-fund strategy can be an effective tool to enable a corporate defined benefit (“DB”) plan to accelerate a de-risking program. 

Fixed income markets have entered an uncharted territory where incentives and pricing structures are turned on their head.

On August 31, 2016 the Brazilian Senate voted – comfortably above the required two-thirds majority – to permanently remove President Dilma Rousseff.

Recently our Liquidity Solutions team from Goldman Sachs Asset Management (GSAM) sat down to discuss the impact of money market reform.

Government Money Market Funds, which invest primarily in cash, government securities and/or repurchase agreements, can offer a range of risks and returns.

On August 4, the Bank of England made its first interest rate cut since 2009, with interest rates now at their lowest level in the Bank’s 322 year history. GSAM’s Andrew Wilson discusses the background to the decision and considers its potential effects on both the UK economy and investment.

In a historic development, the much-anticipated and debated Goods and Services Tax (GST) Constitutional Amendment Bill was passed unanimously in the Rajya Sabha (Upper House) of the Indian Parliament with more than 2/3rd majority.

Steady job gains in the US have provided critical fundamental support for financial markets in an environment where growth in many economies is faltering, political and geopolitical event risk is elevated and monetary policy is increasingly disruptive.

On the 17th of June 2016 the European Council formed a final opinion on the European Union (“EU”) Money Market reform legislative text, advancing the probability of changes to regulatory requirements for European-domiciled money market funds (MMFs).

The world of money market funds is in a state of flux. Cash and liquidity investors are examining new regulations taking effect in October 2016 to see if their investment decisions and practices need rethinking.

This month we bring together views from across our platform on the recovery, including the supportive trend in flows, the macro factors guiding them and the case for strategic allocations to emerging markets.

In this edition of Macro Insights we consider Japan’s gradual recovery from a generation of stagnation.

In this edition of Macro Insights we take a close look at the recent market behavior, the issues driving it, and the extent to which they may be obscuring more-positive fundamental factors.

In this turbulent start to the year we look to Europe, a laggard in the global recovery that now appears to offer among the more promising prospects for returns.

Maximizing returns is a key goal for most investors, but many overlook an important variable - taxes. Tax-managed strategies may benefit some investors by improving tax efficiency while still providing attractive returns.

Over the last quarter century, alternatives frequently outperformed stocks or bonds.

Taylor Jordan, Former Co-Founder of Imprint Capital, discusses the evolution of impact investing with Hugh Lawson, Global Head, ESG Investing Efforts, Goldman Sachs Asset Management.

How is Big Data shaping the economic landscape and transforming industries? Our investment teams and industry experts provide a framework for assessing Big Data and outline key implications and opportunities for investors.

GSAM’s Fundamental Equity and Fixed Income teams discuss how big data can be a strategic advantage or disruptive force in companies and sectors.

Credit Card Data may help forecast earnings growth in the US more quickly than traditional methods.

What is equity factor investing, and how is it useful?

As with most aspects of investing, fiduciary responsibility in ESG and impact investing does not lend itself to all-or-nothing answers. 

Increasing the number of strategies may lower volatility, without detracting from returns.

John Goldstein, Former Co-Founder of Imprint Capital, discusses how an effective ESG program calls for a focus on key metrics with Hugh Lawson, Global Head, ESG Investing Efforts, Goldman Sachs Asset Management. 

Jake Flomenberg, Partner at Accel, weighs in on how big data application startups and open source software are transforming software development.

Joe Lonsdale, Founding Partner, 8VC, shares his views on big data and examines some of the companies pushing the boundaries of the technology today.

Josh James, Founder and CEO of Domo, discusses how data analytics are revolutionizing the way people run and understand their businesses.

The ability to process data, gleaning insights that were previously hidden from plain view, and converting them to actionable information is critical to success for data-driven investors.

Portfolios with lower volatility—for instance, those which incorporate alternative strategies—may reduce risk.  

Investors need a comprehensive understanding of key metrics of ESG factors in a portfolio.

In an ultra-connected world where transparency is the norm, investors have begun to appreciate that compartmentalizing their values and investment decisions is no longer practical. 

Armen Avanessians, chief investment officer of Goldman Sachs Asset Management’s Quantitative Investment Strategies team, discusses how big data can help investors gain an informational advantage.

The outlook for EMD against the current global backdrop.

Get an inside look at our quant investing process and the signals that drive it.

Investors should review the liquidity tools available to address a tricky trilemma.

Rick Scott, Vice President of Finance and Compliance at the McKnight Foundation, discusses his views on ESG and impact investing with GSAM.

While computers today may not yet be as adept with language as humans, natural language processing will become a crucial part of the investing process in the coming years.

With the abundance of data available across industries, it is more important than ever for investors to have an information advantage and apply data analytics to their investment approach.

A closer look at how data analysis is driving innovation across a wide variety of industries and the economy at large.

Investors should look for situations where ESG has delivered tangible outcomes.

Big data has become a powerful force in the election process and is likely to serve an increasingly central role in future political camaigns. 

GSAM’s Quantitative Investment Solutions team shares their synthesized views on the role of big data in potential investments and key techniques for approaching big data.