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BNP Paribas Asset Management USA, Inc.

The asset manager for a changing world

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18 December 2018

Chi Time: What’s new in China’s 2019 outlook?

Problems are not stop signs, they are guidelines. Robert H. Schuller    Let us consider the four GDP components – consumption (C), investment (I), government expenditure (G) and net exports (NX).  The outlook for NX is clouded by the Sino-US trade conflict.

12 December 2018

Structural changes explain stagnating wages in US labour markets

High levels of local concentration suggest employers have market power

5 December 2018

Investment Outlook 2019: Regime change

Out now: our take on markets and the economy and our asset class expectations

28 November 2018

From a Sino-US trade war to a cold war and global disruption

If you can, help others; if you cannot do that, at least do not harm them. - Dalai Lama   Summary The Sino-US trade tension risks escalating to a new cold war, which could cost not only China and the US, but also the world economy, dearly. Collateral damage to the global system could be another round of currency war in the short term with new volatility dynamics coming from China. If the end of the last Cold War fostered global economic integration, the beginning of the next one - between China and the US - will likely produce fragmentation, with long-term consequences on even technological innovation and climate change.

7 November 2018

A post-election recipe: Gridlock with a dash of stimulus

Equity markets' usual year-end Santa Claus rally might get an additional boost

31 October 2018

The six key themes for US Treasuries in Q4 2018

The primary themes impacting the yields of US Treasuries and the pricing of future levels of inflation (via breakeven inflation rates (BEIs)) have changed little in the last few months. They continue to generate a range-trading environment for US Treasury bonds and TIPS.

8 October 2018

Emerging markets – buy the dip?

Growth dynamics and demographics add to the arguments in favour

2 July 2018

The dove in the dots: paving the way for a US inflation overshoot

Does the FOMC hope that with only moderate policy tightening, it can eventually succeed in returning US inflation to objective after an overshoot?  

2 July 2018

US financial sector performance: falling down the (yield) curve

The financial sector had been assumed to be one of the equity sectors that would outperform the broad S&P 500 index in 2018. Robust US economic growth following the passage of tax cuts would boost cyclical sectors and deregulation would enhance profits. But instead of market-beating returns, the sector’s total return up to 27 June was -4.3%, compared to a 3.0% gain for the rest of the index. What are the reasons for the disappointing figures? Might things turn around by the end of the year?

22 June 2018

Goldi who? The prospects for risk asset outperformance in 2018

Hopes were so high. At the start of the year, the ‘Goldilocks’ environment — characterised by above-trend global growth, contained inflation, and moderate volatility — looked set to continue, if not quite as strongly, in 2018.

21 June 2018

Political maneuvers and the implications for investors

Taking a closer look at how the tariff cards may play out and which markets may suffer the most should things get nasty

19 June 2018

Inflation-linked bonds outlook

What are the implications of recent political events in Italy, deepening trade tensions and the June FOMC meeting?

18 June 2018

FOMC meeting June 2018

At the 13 June meeting, the Federal Open Market Committee raised the target range for the federal funds rate by a quarter point to 1.75-2.00%, marking the seventh increase in US interest rates of the current cycle.

15 June 2018

Clearing the air

In China, policy is driving the push to cleaner energy, but the setup in India makes the transition tougher

5 June 2018

Goldi-lost?

Cooling growth, inflation becoming ‘too hot’ - what is the outlook for Goldilocks?

5 June 2018

China on the rise – MSCI adding 226 A-shares to flagship indices

Inclusion of mainland-listed stocks marks milestone in the opening of China’s financial markets

5 June 2018

World Environment Day: focus on plastic pollution

"If you can't re-use it, refuse it"

5 June 2018

Recent performance in emerging market fixed income: A sell-off in three chapters

How did the largest drop in nearly two years start and when will it end?

23 May 2018

An allocation to inflation-linked bonds may make sense as price pressures rise

With developed market inflation looking set to rise in the coming months, investors would do well to understand the implications for their portfolios and to consider how best both to hedge against inflation and achieve greater diversification

23 May 2018

Natural capital: thinking beyond carbon in sustainable investing

Valuing the stock of renewable and non-renewable resources – our natural capital – adds another perspective to investment decisions, for example, in terms of the potential risks that ecosystem impairments present to the outlook for industries ranging from agriculture to tourism. Mapping natural capital dependencies matters to investors, argues Robert Poujade.

23 May 2018

Crude oil market: too much good news in the price

While oil has been the star performer among commodities so far this year, the balance of risks is shifting towards a re-alignment with other growth-sensitive assets. Indeed, the risk/reward profile for crude oil prices appears skewed to the downside.

7 May 2018

Here we go again: the risk to equities from rising rates

The most recent run up in US Treasury yields (the 10-year benchmark bond yield peaked at 3.03% on 25 April 2018, though it had fallen back to 2.94% by 4 May), and the lacklustre performance of US equities, have renewed worries about the outlook for the stock market in face of higher financing costs. Many investors are worried that with price-to-earnings and price-to-sales multiples still at elevated levels, they could see multiple compression even if earnings growth remains good (the price-to-next-twelve month earnings ratio on S&P 500 is around 16.8x and price-to-sales around 2.1x, both well above long-run averages).

3 May 2018

Passports, prosperity and UK property post Brexit

As the UK prepares to leave the EU, the lack of clarity on how the split-up will work confounds the outlook for both the British economy and UK property stocks.

3 May 2018

A road map for navigating protectionism and possible trade wars

The decision by the Trump administration to impose tariffs on US imports of steel and aluminium has unsettled politicians, commentators, investors and financial markets as it could be the opening salvo in what turns out to be full-blown trade war.

3 May 2018

A cracked rear-view mirror: Shiller price/earnings ratios and equity market valuations

One of the metrics most often cited for measuring equity market valuations is the Shiller P/E, also known as the Cyclically-Adjusted Price/Earnings ratio (CAPE), defined as the price-earnings ratio based on average inflation-adjusted earnings from the previous 10 years.

23 April 2018

Fixed-income quarterly outlook: as good as it gets?

Read about our asset class views and our economic and policy analysis

20 April 2018

De-fanged? Threats to the tech sector from Trump and regulation

It was of course inevitable (in retrospect) that the strong performance of the technology sector over the last year would suffer a reversal; it was just a question of when and what the trigger would be. In the end, there were two guns: tariff threats from the Trump administration, and rising concerns about taxes and regulation following the Cambridge Analytica revelations about the misuse of Facebook user data.

20 April 2018

Thoughts on US breakeven inflation rates: a new Fed stance and trade concerns

In considering what drives breakeven inflation (BEI) rates, mostly the gap between the yield on 10-year US Treasury inflation-protected securities (TIPS) and that on regular 10-year Treasury notes which acts as a measure of expected inflation, our approach involves the analysis of their components, namely (i) expected inflation (ii) inflation risk premiums (iii) liquidity premiums.

18 April 2018

Brexit update – reaching a milestone and now facing other bumps in the road

In March, Britain and the EU reached a milestone agreement  in their Brexit  negotiations, but the road to a sensible outcome remains complex and long, with ample opportunity for spats and setbacks along the way.

17 April 2018

Kuroda begins second term at Bank of Japan

On 9 April, Haruhiko Kuroda began his second term as governor of the Bank of Japan (BOJ), facing a familiar challenge.

16 April 2018

A roadmap for navigating protectionism – the elevator and the staircase

Join our strategy and economics experts at the 25 April webcast

29 March 2018

A road map for navigating protectionism: the elevator and the staircase

Trade war scenarios: tackling volatility and risk-off situations

28 March 2018

Global warming and environmental legislation: will ‘David’ defeat ‘Goliath’?

When the owner of a small Peruvian farm moved to sue a giant of the energy industry, no-one noticed, but, as the case progresses, it could have a major impact on legislation and how future lawsuits brought on the grounds of global warming are handled. It could also spur the investment needed to accelerate the technological advances to deal efficiently with the menace of climate change.

12 December 2018

Outlook 2019: Markets – adapting to quantitative tightening

On credit, emerging markets and the US dollar

29 October 2018

Equity market valuations: Where are we now?

A look at developed and emerging equity valuations to assess which now appear attractive, at least from a stock multiples viewpoint  

23 October 2018

Navigating the wall of worry with small caps

Small caps are trading at a discount to large caps

10 September 2018

Asset allocation update – September 2018

We remain long equities and underweight fixed income, notably in the eurozone, but we trimmed our risk exposure

27 July 2018

Emerging market fixed income: an attractive entry level after the correction

Emerging market debt has been the subject of much interest over the last few years, but recent volatility has created uncertainty about the asset class. We are convinced that besides offering an attractive return/risk ratio and the potential for high returns, current valuations constitute an attractive entry point.

16 July 2018

Blackout: be on the alert for a rebound in volatility

Watch out for the effects of factors such as rising interest rates and the end of central bank asset purchases

16 July 2018

Infrastructure debt: powering ahead

Infrastructure debt offers investors attractive features from steady cash flow to credit quality

11 July 2018

Asset allocation quarterly – July 2018

Foreseeing calmer markets over the next few months, we have identified several reversal themes

20 June 2018

The role of currencies in institutional portfolios

How can foreign currency exposure best be managed in institutions’ portfolios?

14 June 2018

When the QE music stops, US MBS will still be dancing

When leading central banks stop playing the monetary policy tunes that many financial markets have been dancing to over the past decade – that jaunty ditty called quantitative easing, or QE as it is known by its abbreviation – the financial assets that were the winners under QE look set to become the losers, but there is one asset class that should continue to hum along nicely: US mortgage-backed securities (MBS), as fund manager John Carey explains.

11 June 2018

Green bonds: investments generating environmental and ecological benefits

Green bonds are meant to (re)finance projects with the ultimate goal of combating climate change or mitigating its impact

8 June 2018

Asset allocation – June 2018

Three shocks hit markets: (i) an escalation of political risk, (ii) weakening growth (notably in Europe); and (iii) a stronger USD, which led to stress in emerging markets In Italy, market worries about fiscal excesses and the prospect of a clash between the new government and European authorities escalated. As a result, ‘peripheral’ eurozone debt sold off. Italian markets are likely to remain volatile in coming months as investors digest further news on political developments and economic data There are signs of a growth slowdown, notably in the eurozone, according to recent data. However, we find it difficult to call a turn in the economic cycle yet. While the data have weakened, activity is still expanding both in the developed world and emerging markets Emerging market stress was largely a consequence of higher US yields and USD strength. In our view, local debt offers value and currently lower US yields are reassuring, but we need to see the USD and global risk sentiment stabilise for EM debt to rally materially

4 June 2018

Monthly video – June 2018

Guillermo Felices reviews recent events and discusses their impact on asset allocation, focusing on any significant changes in the model portfolio.

31 May 2018

ESG criteria in infrastructure and commercial real estate investments

Extra-financial factors are at the heart of BNP Paribas Asset Management’s (BNPP AM’s) investment philosophy. Environmental, social and governance (ESG) criteria are fully integrated in our investment decision process for our infrastructure and commercial real estate debt funds.

18 May 2018

Currency risk – hedge in May and go away?

Join Adnan and Momtchil for our 23 May webcast

4 May 2018

Asset allocation – May 2018

SUMMARY: As in February, US Treasury yields rose to the point where they ended up rocking markets, but this time the disruption was more visible in the US dollar and emerging markets than in equity markets / We see several factors for the rise: (i) US inflation and crude oil prices hit 2018 highs in April, (ii) US macroeconomic data have been robust enough for the US Federal Reserve to continue normalising its interest-rate policy, and (iii) rates markets have become more concerned about US Treasury debt issuance / The bar is quite high for further interest-rate increases in the near term, but when policy tightening does resume, we think this will not keep equity markets from rallying as long as the growth backdrop remains solid / The stronger USD reflects disappointing economic activity data in the G10 and emerging markets compared to the US. This is consistent with markets pricing in reduced expectations of central bank policy normalisation in Europe and Japan / Further USD strength is possible, but we doubt it can persist in the medium term unless the prospects for growth in the US continue to decouple from those for the rest of the world

4 May 2018

Our FX outlook

Our general outlook for the rest of 2018 is for continued global growth with low but rising inflation worldwide. In this scenario, major developed market central banks will gradually reduce the extraordinary level of liquidity in financial markets.

3 May 2018

Monthly video – May 2018

Guillermo Felices reviews the major events of the previous four weeks and discusses their impact on asset allocation, focusing on any significant changes in the model portfolio.

3 May 2018

Following an unlikely model, consumer healthcare M&A creates investment opportunities

There are not many obvious parallels between tobacco and healthcare, but when it comes to investment opportunities, there is one trend where healthcare – particularly consumer healthcare – appears to follow tobacco’s lead: a multi-year industry consolidation.

3 May 2018

Are you investing in ultra-processed foods?

Nutrition experts from Brazil and Canada last year published a disturbing report on the impending world health crisis arising from ultra-processed foods. These foods now account for more than half of all food purchases in developed countries including the UK and the US.

30 April 2018

Can we still beat the S&P 500? A multi-factor approach can!

The market in US large-cap equities is the most liquid and competitive one among equity markets in developed countries.

20 April 2018

Local currency emerging market debt: deserving of a closer look

Local currency debt has become one of the largest fixed income universes over the past eight years, yet remains under-appreciated We can see a number of triggers for a pick-up in demand We believe growth is the main forward indicator for currencies The asset class offers multiple opportunities, collating a heterogeneous group of bond issuers including countries in different stages of the economic and monetary policy cycle

20 April 2018

Alternative debt – real assets are here to stay

Infrastructure and real estate debt have become an essential part of asset allocation for investors looking for stable income from long-dated investment instruments. They typically have an attractive risk/return profile, bringing diversification benefits to investor portfolios alongside the potential to generate sustainable, inflation-beating investment returns. Join Pauline Fiastre, Senior Portfolio Manager, Infrastructure Debt, and Philippe Deloffre, Head of Real Estate Debt, for this webcast on why real assets should matter to investors. Pauline and Philippe will cover: the size and scope of the real asset debt market the current market environment across Europe why these ‘alternative assets’ can offer stable and predictable cash-flow the risk profile of these assets how environmental, social and governance (ESG) criteria can be a defining factor in selecting quality assets.

10 April 2018

Asset allocation quarterly – April 2018

Concerns over inflation, less central bank accommodation / trade protectionism escalates / activity data disappoints / reducing equity exposure, macro view unchanged / adding to EMU duration underweight

5 April 2018

Infrastructure debt still delivers an attractive risk/reward

Karen Azoulay, head of infrastructure debt, discusses how BNP Paribas Asset Management (BNPP AM) is positioned at a time when governments are focusing more on renovating existing infrastructure and want to call on private funding to a greater extent.

3 April 2018

Monthly video – April 2018

Guillermo Felices reviews the major events of the previous four weeks and discusses their impact on asset allocation, focusing on any significant changes in the model portfolio.

29 March 2018

Some thoughts on drawdowns and liquidity

In a previous article, entitled “Avoiding the perils of the ‘drawdown’”, I explored the concept of ‘drawdowns’, the heavy losses that are the consequences of these episodes and some ways for reducing their impact. In this article, I will discuss the relationship between drawdowns and liquidity, based on the works of John Maynard Keynes and Nassim Taleb and lessons drawn from the  1987 and 2007 financial crises.

29 March 2018

A roadmap for navigating protectionism

Financial markets have experienced another bout of volatility, this time related to an escalation in protectionism involving the US and China. An escalation of such tensions towards a full-blown trade war would be very damaging for global growth and certainly for global financial markets. We therefore describe two risk scenarios associated with such an escalation and present a road map to navigate them.

26 March 2018

BNP Paribas Asset Management becomes a Climate Bonds Partner

Programme promotes green finance including green bonds

7 March 2018

Monthly video – March 2018

Guillermo Felices reviews the major events of the previous four weeks and discusses their impact on asset allocation, focusing on any significant changes in the model portfolio.

7 March 2018

Asset allocation – March 2018

SUMMARY: Market review: the rebound in risky assets is ongoing, but prices are still below the pre-correction highs / Should we worry about inflation? We see a modest pick-up rather than a take-off / Can equities perform in a rising rate environment? Yes, but typically driven by strengthening earnings growth / Which safe assets can offer protection in Fed tightening cycles? No silver bullet; bonds may not offer shelter

27 February 2018

An expert view from BNP Paribas Asset Management / Liquidity solutions

“Optimise cash management via the money market and short-term bonds.” What are the options for managing cash in the current environment of negative interest rates? For Philippe Renaudin, Head of the Money Market team at BNP Paribas Asset Management, and Patrick Barbe, Head of the Euro Bond team, it is still possible to generate competitive returns through active management and opportunistic strategies.

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Explore solutions

Learn how we meet the needs of both institutional and retail investors.

Key strategies

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U.S. small cap equities

Employs fundamental analysis to identify companies with long-term growth potential.

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Emerging markets fixed income

Seeks to provide strong risk-adjusted returns.

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Global emerging markets equity

Invests in quality companies at a compelling price.