September 2025
Please see below for a series of fixed income and currency macro viewpoints from Insight’s lead portfolio managers.
| Insight Spokesperson | Quote |
|
Brendan Murphy
Head of Fixed Income, North America  |
Topic: Global bond markets have outperformed domestic US markets "Performance speaks for itself. Global bonds have consistently delivered superior returns for significantly lower volatility than US bonds on a currency-hedged basis. To take 5-year returns as an example (to the end of May 2025), the Bloomberg Global Aggregate (USD Hedged) outperformed the Bloomberg US Aggregate by 1.17% pa with 1.5% lower standard deviation. Monetary policy cycles have been increasingly asynchronous since the pandemic, so the best and worst performing bond markets tend to be different year by year. This can free investors from being exposed to just one central bank and one interest rate cycle. On top of that, global bonds are a much larger universe, so offer a much larger range of alpha opportunities for those with large enough global teams. Political risks such as tariffs will also likely create sectoral and security selection-based winners and losers across the globe." |
|
April LaRusse
Head of Investment Specialists  |
Topic: Markets are homing in on debt sustainability "The global fiscal landscape is fragmenting, with countries like the United States, France, Belgium, and Brazil veering toward unsustainable debt trajectories. As deficits deepen and political will for reform wanes, markets are beginning to price in the risk through steeper yield curves, wider sovereign spreads, and rising inflation expectations. In contrast, fiscally disciplined nations such as Norway and Ireland offer a blueprint for resilience. Our analysis suggests that fiscal sustainability is no longer a background concern but becoming a central determinant of asset performance, with potential implications for economic stability in some cases in the years ahead." |
| Adam Whiteley Head of Global Credit  |
Topic: Credit’s income-generating potential “In our central case for the economic and policy outlook, current credit spreads appear justifiable – but with valuations at multi-decade lows, there’s little room for error. However, the real strength of credit lies in its income-generating potential, particularly through strategies that capture the full yield rather than just the spread. This positions credit to deliver total returns that could rival or even surpass traditional growth assets. With much of the good news already priced in, our focus is on defensive credit implementations – carefully calibrated by rating category and sector exposure to preserve resilience while maintaining access to the attractive levels of available income.” |
|
Francesca Fornasari
Head of Currency  |
Topic: Dollar’s reserve status: resilient but under pressure "The dollar’s reign as the world’s reserve currency, established in 1944, is facing renewed scrutiny. Sanctions on Russia’s central bank, the rise of Chinese bonds in global indices, and the EU’s move toward joint debt issuance have all chipped away at its dominance. But the dollar’s deep liquidity, institutional trust, and entrenched role in global trade continue to underpin its resilience. As the global financial architecture evolves, the dollar’s reserve status is bending under pressure – but it’s not breaking." |
| Gareth Colesmith Head of Global Macro Research  |
Topic: Tariff revenue gains matter, but it’s still not enough "The United States is entering a new era of trade policy, with average tariff rates now stabilising in the high teens and generating monthly revenues in the region of $29 billion – more than triple last year’s average. While these tariffs are expected to reduce the budget deficit by 0.6% of GDP annually, the broader fiscal outlook remains precarious. As global supply chains adapt to this structural shift, inflationary pressures are mounting and growth may be marginally dampened." |
| Erin Spalsbury Head of US Investment Grade  |
Topic: Credit fundamentals look robust "Credit fundamentals remain broadly resilient. Although expectations were for a surge in M&A activity under the new administration, deal flow has been subdued for much of the year, only gaining momentum more recently. Earlier transactions were largely equity-financed, but there has been a notable shift towards greater reliance on debt. Encouragingly, companies are entering this phase from a position of financial strength, which should help them absorb any margin pressure stemming from a potential economic slowdown. Over the past several years, upgrades have consistently outpaced downgrades, and we believe most issuers are well-equipped to navigate a modest softening in fundamentals, in line with our expectations." |
| Nathaniel Hyde Senior Portfolio Manager  |
Topic: Slowing growth may favour bonds over equities "If US growth merely slows but does not contract, that could be a sweet spot for corporate bonds. Slowing growth environments tend to be trickier for equities, because sustaining profit growth organically becomes harder when the economy is cooling. But in credit, we just need bonds to be paid back. So, if the economy is still growing, it implies that corporate top lines are still improving on average, and even if companies struggle to grow, this shouldn’t affect their ability to pay back their debt on average." |
| Jill Hirzel Senior Investment Specialist  |
Topic: From defensive anchor to growth engine "Fixed income is no longer just a defensive anchor – it’s evolving into a strategic growth engine. With absolute yields at current levels, we believe a thoughtfully constructed fixed income portfolio, combining the power of compounding, active management and global diversification, can offer long-term return potential that rivals equities. Institutional investors are increasingly recognising the potential of fixed income to generate superior risk-adjusted outcomes, especially in an environment where traditional growth assets face heightened volatility and valuation pressures." |
| Matthew Merritt Head of Multi-Asset Strategy Team  |
Topic: Tools for scale, speed and access "As institutional investors grapple with the challenges of scale, speed, and market access, tactical asset allocation overlays are emerging as a vital tool for enhancing portfolio agility. By leveraging synthetic replication and robust collateral frameworks, overlay managers enable clients to respond swiftly to market shifts without compromising strategic exposures." |