WHAT WE THINK…

 

WHAT WE THINK

“We are now in the third quarter since the pandemic became a pandemic (according to the World Health Organisation). It is questionable as to whether we are much wiser at dealing with the myriad of problems associated with COVID-19, although we are undeniably, more knowledgeable. We are not scrambling to build more ventilators, because we now know that there are preferable treatments, such as steroids, that have less damaging side effects and better efficacy. And we are not as scared of surface transmission of the virus having seen little evidence of broad spread in this way. But we have not been able to prevent a second wave, and we appear to be facing the same struggles navigating through the rise in cases that we faced in March and April, if not with more difficulty.”

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Q3 2020

 

 

Lorica Focused Fixed Income

“The US Treasury and Government of Canada curves both steepened slightly over the month as yields moved marginally higher, but with the front ends in both countries remaining firmly in place. Corporate yield curves also steepened as credit spread curve steepening added to the underlying sovereign curve steepening. Investors showed a preference for shorter-term debt, given the level of uncertainty from a myriad of sources including the US stimulus stalemate, rising COVID-19 cases, upside (albeit lagging) growth surprises and the US election. Nevertheless, the rise in mid and long-term yields was not enough to move beyond the trading ranges established since March.”

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October 2020 Commentary

 

Lorica Focused Corporate Bond

“Domestic credit spreads were steady through October despite headwinds from a surge in domestic COVID cases, equity market volatility and US political uncertainty. The stable credit tone for most sectors was buttressed by constructive earnings reports and reduced supply. Overall, credit spreads widened by an average of one basis point for the month, with short-term higher-beta issues outperforming. The credit curve steepened further as investors cautiously reached for yield and were hesitant to take on additional exposure to lower-rated long-term debt, particularly for those issues with limited secondary market depth.”

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October 2020 Commentary

  

Lorica Short Term Bond

“The US Treasury and Government of Canada curves both steepened slightly over the month as yields moved marginally higher, but with the front ends in both countries remaining firmly in place. Corporate yield curves also steepened as credit spread curve steepening added to the underlying sovereign curve steepening. Investors showed a preference for shorter-term debt, given the level of uncertainty from a myriad of sources including the US stimulus stalemate, rising COVID-19 cases, upside (albeit lagging) growth surprises and the US election. The rise in five-year yields was 4 ½ basis points, not enough to move beyond the trading range established since March.”

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October 2020 Commentary

WHAT WE THINK…
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
 
 
FOCUSED FIXED INCOME
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
FOCUSED CORPORATE BOND
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011

SHORT TERM

▸2019
▸2018
▸2017
▸2016
▸2015
▸2014

WHAT WE THINK…

 

WHAT WE THINK

“We are now in the third quarter since the pandemic became a pandemic (according to the World Health Organisation). It is questionable as to whether we are much wiser at dealing with the myriad of problems associated with COVID-19, although we are undeniably, more knowledgeable. We are not scrambling to build more ventilators, because we now know that there are preferable treatments, such as steroids, that have less damaging side effects and better efficacy. And we are not as scared of surface transmission of the virus having seen little evidence of broad spread in this way. But we have not been able to prevent a second wave, and we appear to be facing the same struggles navigating through the rise in cases that we faced in March and April, if not with more difficulty.”

Read More→
Q3 2020

 

 

Lorica Focused Fixed Income

“The US Treasury and Government of Canada curves both steepened slightly over the month as yields moved marginally higher, but with the front ends in both countries remaining firmly in place. Corporate yield curves also steepened as credit spread curve steepening added to the underlying sovereign curve steepening. Investors showed a preference for shorter-term debt, given the level of uncertainty from a myriad of sources including the US stimulus stalemate, rising COVID-19 cases, upside (albeit lagging) growth surprises and the US election. Nevertheless, the rise in mid and long-term yields was not enough to move beyond the trading ranges established since March.”

Read More→
October 2020 Commentary

 

Lorica Focused Corporate Bond

“Domestic credit spreads were steady through October despite headwinds from a surge in domestic COVID cases, equity market volatility and US political uncertainty. The stable credit tone for most sectors was buttressed by constructive earnings reports and reduced supply. Overall, credit spreads widened by an average of one basis point for the month, with short-term higher-beta issues outperforming. The credit curve steepened further as investors cautiously reached for yield and were hesitant to take on additional exposure to lower-rated long-term debt, particularly for those issues with limited secondary market depth.”

Read More →
October 2020 Commentary

  

Lorica Short Term Bond

“The US Treasury and Government of Canada curves both steepened slightly over the month as yields moved marginally higher, but with the front ends in both countries remaining firmly in place. Corporate yield curves also steepened as credit spread curve steepening added to the underlying sovereign curve steepening. Investors showed a preference for shorter-term debt, given the level of uncertainty from a myriad of sources including the US stimulus stalemate, rising COVID-19 cases, upside (albeit lagging) growth surprises and the US election. The rise in five-year yields was 4 ½ basis points, not enough to move beyond the trading range established since March.”

Read More →
October 2020 Commentary

WHAT WE THINK…
▸2020
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
Q4
Q3
Q2
FOCUSED FIXED INCOME
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011
FOCUSED CORPORATE BOND
▸2019
▸2018
▸2017
▸2016
▸2015
▸2014
▸2013
▸2012
▸2011

SHORT TERM

▸2019
▸2018
▸2017
▸2016
▸2015
▸2014