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Market turmoil brings opportunities for credit investors, Aeon Investments research reveals
Invest
Market turmoil brings opportunities for credit investors, Aeon Investments research reveals
New research conducted by Aeon Investments, a London-based investment company specializing in credit, has revealed a strong consensus among institutional investors on the potential value fixed income fund managers can bring to portfolios amid the current market volatility.
Market turmoil brings opportunities for credit investors, Aeon Investments research reveals
New research conducted by Aeon Investments, a London-based investment company specializing in credit, has revealed a strong consensus among institutional investors on the potential value fixed income fund managers can bring to portfolios amid the current market volatility.
The study surveyed pension funds, insurance asset managers, family offices, and wealth managers, collectively managing approximately $544 billion, uncovering positive attitudes towards the role of active management in navigating turbulent markets. Nearly all respondents agreed that fund managers are increasingly capable of adding value through strategic sector rotation to leverage valuation discrepancies or market triggers for short-term gains. Specifically, one-quarter of those surveyed strongly agreed with this stance, while 74% slightly agreed.
The sentiment regarding the future was also optimistic, with a majority of investors expecting the opportunities for fund managers to add value will rise in the next two years. Specifically, 22% of participants predict dramatic increases in such opportunities, while 59% foresee slight increases. In contrast, 19% believe the situation will remain unchanged.
The research further suggests that opportunities within the credit and fixed income market, especially those based on high conviction ideas, contrarian themes, and dislocation opportunities, are also expected to grow. Fourteen percent of investors forecast these opportunities to dramatically increase over the next three years, with 73% anticipating a slight increase. Thirteen percent of respondents anticipate no change.
Khalid Khan, the Head of Portfolio Management at Aeon Investments, commented on the findings. He stated, "Active fixed income managers clearly have an opportunity to add value in current markets. It is encouraging to see how many investors recognise the potential from active fixed income investing, which Aeon has long promoted, as a means to boost alpha and manage risk.”
Aeon Investments is recognized for its focus on delivering long-term superior risk-adjusted returns, by investing in key economic sectors while minimizing downside risks for capital preservation. The company employs a research-driven approach, combining qualitative and quantitative techniques for idea generation and due diligence. This encompasses a top-down approach for identifying market inefficiencies and a bottom-up approach for assessing intrinsic value and risk management at the portfolio level.
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