BlackRock Launches an ETF Focused on European Defense Sector Companies

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According to the asset manager, the fund is designed to provide targeted exposure to European defense sector companies, selected based on their revenue levels at a time when European nations are increasing public spending to strengthen their defense capabilities. The firm notes that as Europe advances in reconfiguring its security architecture and enhancing resilience, investors are increasingly interested in aligning their portfolios with national strategic priorities and the opportunities offered by the defense sector.

Research from SIPRI indicates that NATO, excluding the United States, increased its spending by $68 billion, or 19%, between 2022 and 2023. It is also highlighted that all NATO members increased their military spending in 2024. The European Commission has called for an increase in “made in Europe” defense spending to ensure long-term security and generate economic benefits for countries in the region. The proposals include boosting European budgets to create €650 billion in fiscal space over four years. In this context, on May 19, 2025, the United Kingdom and the European Union signed a Security and Defense Agreement. A BlackRock study of EMEA-based portfolios reveals that only 2% have an explicit allocation to the defense sector, with such exposure representing, on average, less than 1.6% of the total portfolio.

Regarding this ETF, Jane Sloan, Head of Global Product Solutions for EMEA at BlackRock, stated: “In recent months, our European clients have consistently expressed interest in gaining exposure to the European defense sector. Many European countries are prepared to increase spending, strengthen cooperation, and prioritize European companies. BlackRock offers investors targeted exposure to the European defense sector while also channeling capital into Europe to support local industry and the strategic goals of the region’s countries. This new launch provides clients with a set of tools to precisely express their views and access the long-term structural drivers of the defense sector.”

Axel Lomholt, CEO of STOXX, added: “At STOXX, we are committed to developing index solutions that respond to Europe’s evolving strategic priorities. Our new STOXX Europe Targeted Defence Index reflects this mission by offering a transparent, rules-based approach to selecting companies that contribute to Europe’s defense and security. The index provides an accurate representation of the industry by incorporating high-quality revenue data from military equipment into the selection and weighting of companies active in the defense industry. This reflects the unique synergies of ISS STOXX, where data, expert insight, and index innovation are combined to meet the market’s changing needs.”

The STOXX Europe Targeted Defence Index is based on the STOXX Europe All Country All Cap Index and selects its components (price-weighted) according to revenue levels derived from military equipment, using ISS research data. This revenue-based selection ensures that the index maintains a strong focus and concentration on companies generating a high percentage of their revenue from the defense sector.

DFEU has a total expense ratio (TER) of 35 basis points and is classified as Article 6 under the SFDR. It is listed on Euronext Amsterdam and Xetra.

Blackstone Launches a Multi-Asset Private Credit Fund

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Blackstone has announced the launch of the Blackstone Private Multi-Asset Credit and Income Fund (BMACX), the firm’s first private interval fund focused on multi-asset credit. According to the company, it is available through advisors and aims to provide access to strategies within Blackstone’s credit platform, which manages $465 billion. The fund offers ticker-based execution with daily subscriptions, quarterly liquidity, and low investment minimums, with capital deployed immediately.

“We believe BMACX can serve as a foundational component in portfolio construction to capitalize on expanding credit markets. It offers individuals full access to Blackstone’s credit platform in what we consider an investor-friendly structure,” said Heather von Zuben, Chief Executive Officer of BMACX.

Dan Oneglia, Chief Investment Officer of BMACX, added:
“Our goal will be to deliver diversified, high-quality income with lower volatility than traditional fixed income products by investing in a broad range of attractive credit assets. We believe this multi-strategy approach positions investors to capitalize on compelling relative value, particularly in dynamic market environments.”

BMACX will invest in a diverse range of credit assets, including private corporate credit, asset-backed and real estate credit, structured credit, and liquid credit, aiming to provide attractive and stable income through monthly distributions while managing risk. BMACX builds on Blackstone’s leadership in delivering private credit solutions to individual investors, with dedicated vehicles focused on direct lending available since 2018.

Strong Demand and High Cost for the First International Debt Issuance of the Milei Era

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CC-BY-SA-2.0, FlickrBuenos Aires, Puerto Madero

The Argentine government had to pay a steep price — 29.5% — in its first international debt issuance under President Javier Milei. Nevertheless, it successfully placed the $1 billion Bonte 2030 bond (a dollar-denominated debt security that pays in pesos), with demand exceeding supply.

This marks the first issuance of local currency bonds under Argentine law targeted at foreign investors in seven years. The offering saw strong demand, with bids totaling $1.694 billion from 146 investors.

The Market Had Expected a Yield Around 22%

The issuance met the goal set by Argentine authorities: to increase reserves without intervening in the exchange rate, which currently fluctuates within two bands. However, the Bonte 2030 came at a high cost: while the market had anticipated a yield of around 22%, the final rate was significantly higher.

“In Argentina, if you go back to what happened in 2017 and 2018, the government at the time (Mauricio Macri’s administration) issued around $4 billion in bonds similar to the Bonte, and the holders of those bonds who kept them to maturity lost all their capital due to a nearly 100% devaluation of the peso. So it makes sense that investors would demand a premium, especially since this is the first significant issuance in the market, in local currency, and with a long duration,” explained Juan Salerno, partner and head of investments for Argentina at Vinci Compass.

Banco Mariva offered a similar analysis: “The 29.5% yield at which the bond was issued exceeded market expectations and may initially seem excessive. However, there are various interpretations: the yield includes an initial risk premium the government must pay to reestablish market access. Another perspective (supported by the government) is that the 29.5% rate aligns with both the dollar yield curve (around 12%) and the CER curve (real yields of around 10%).”

Paula Bujía from Buda Partners explained that “demand was oriented toward real yields closer to 10%, far above the 5% that some local traders considered reasonable and in line with current CER (inflation-adjusted) bond yields. The inclusion of a two-year early redemption (‘put’) clause also serves to reduce risk. Additionally, the perception that the official exchange rate is overvalued is not a minor factor: had the peso been closer to the upper band (1300–1400), the required yield might have been lower.”

Analysts from Adcap Grupo Financiero noted that the rate was identical to that of a one-year peso Treasury bill (Lecap): “As in other auctions, the government offered a premium, though in this case it was significant. The cut-off rate was set at a nominal 29.5% (31.7% effective annual), virtually identical to the one-year Lecap rate.”

A Positive Issuance to Boost Reserves

A recent report by Cohen Aliados Financieros noted that under the terms of the IMF agreement from April, the BCRA (Central Bank of Argentina) is required to bring its net reserves to –$2.746 billion by June of this year and reach a positive balance by the end of 2025.

In this context, Juan Salerno of Vinci Compass explained that this issuance is positive given the government’s goal of meeting its reserve targets with the IMF, because “local currency bonds are counted at 100% toward net reserves, and this bond is subscribed in dollars, which means the dollars go directly into reserves. The broader context is that the government doesn’t want to buy dollars within the floating bands, so the only way to meet the reserve target is to turn to external borrowing.”

Analysts point to another positive aspect: it opens the door to similar future issuances. The identities of the 146 entities that purchased the Bonte 2030 are not public, but the market believes they are international risk funds.

Salerno noted that, internationally, Vinci Compass currently holds no peso-denominated Argentine bonds but does hold dollar-denominated ones — both sovereign and corporate, including some provincial issues. Locally, the firm does participate in the peso market.

“The Bonte issuance is a first step because there are still capital controls in Argentina (exceptions were made in this case), and we still need greater predictability. We believe it will be successful because this rate will attract many investors. Now, it’s important to watch how the secondary market behaves; I also believe it will be successful if the government maintains its goal of controlling inflation,” said the Vinci Compass expert.

Paula Bujía of Buda Partners also offered an encouraging note: “Looking on the bright side, and recalling the BOTES issued in 2016 — which debuted with high yields but then compressed significantly as macroeconomic conditions improved — this new placement could meet a similar fate. If Argentina continues to normalize its economy and starts accumulating reserves, the Bonte 2030 could follow a similar path of spread compression and pave the way for less onerous issuances for the government. But it’s important to note that issuing debt is not enough: reserves must also be accumulated to satisfy the market.”

Columbia Threadneedle Investments Enters the Active ETF Business in Europe

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Columbia Threadneedle Investments has announced that it will offer its range of active ETFs in Europe. According to the firm, it plans to launch four equity UCITS vehicles in the UK and Europe over the course of this year, subject to regulatory approval. These four new active ETFs will offer European clients exposure to global, U.S., European, and emerging market equities. The firm also noted that its goal is to expand the range and include active fixed income ETFs next year.

The initial product range will be managed by Chris Lo, Senior Portfolio Manager, and his team based in the United States. They currently manage $15 billion in assets across 13 U.S.-domiciled funds. Columbia Threadneedle has a strong track record in designing and managing ETF strategies tailored to client needs, with $5.5 billion in assets under management across 14 U.S.-domiciled ETFs.

The new active equity ETFs launching in the European market will leverage the firm’s expertise in ETF and systematic solutions management. According to Columbia Threadneedle, the new lineup is built on the investment approach of the Columbia Research Enhanced Core ETF, a Morningstar five-star rated fund that combines quantitative analysis with Columbia Threadneedle’s extensive fundamental research capabilities. “The active equity ETFs will be truly active, designed to outperform the index,” the firm states.

Following the announcement, Richard Vincent, Head of Product (EMEA) at Columbia Threadneedle Investments, explained: “We are continuously looking to develop and expand our investment offering for clients, providing innovative, high-value products and solutions that complement our existing range. In this regard, bringing active ETFs to Europe and building on the foundation of our successful U.S. platform is a natural expansion that draws on years of experience delivering ETF solutions to our U.S. clients.”

A Clear Vision

Columbia Threadneedle’s new European active equity ETFs aim to meet various needs of discretionary fund buyers. First, by offering high-conviction core equity positions as fundamental building blocks for portfolios—strategies aligned with benchmark indices but designed to generate alpha through genuine stock selection.

The firm also emphasizes that this is a proven, consistent, and replicable investment strategy, combining quantitative and fundamental analysis within a rules-based, repeatable, and easy-to-understand framework. In addition, it offers transparency and cost efficiency: daily disclosure of investment decisions, a portfolio designed to minimize transaction costs, and competitive fees.

“We are excited to bring this innovative and differentiated investment strategy to the European market in an active ETF format. These four new active ETFs will complement our existing open-ended fund offering, expanding options for clients seeking core active components for their portfolios. Active ETFs are increasingly being adopted by clients as an efficient way to implement portfolios. By leveraging our U.S. track record, we can offer clients excellent value. We believe this represents a genuine growth opportunity for us in the region,” said Michaela Collet Jackson, Head of Distribution and Marketing for EMEA at Columbia Threadneedle Investments.

Global Private Equity Investment Grows 14% After Two Years of Decline

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The latest report from McKinsey & Company, the Global Private Markets Review 2025, reveals that raising capital continues to be a challenge, resulting in a 24% reduction in new commitments globally to $589 billion in 2024—marking the third consecutive year of decline. Nevertheless, distributions to LPs surpassed capital contributions for the first time since 2015, providing much-needed relief to investors during a pivotal moment for sector liquidity.

However, global investment in Private Equity reached $2 trillion in 2024, recording a 14% increase after two years of decline. This rebound was driven by a notable rise in both the number and value of large transactions, primarily under buyout strategies, amid more favorable financing conditions. Moreover, entry multiples approached levels seen in 2021 and 2022, reflecting increased investor confidence in the potential for asset appreciation.

Greater Focus on Value Creation

The 2024 investment landscape was marked by higher entry multiples and longer holding periods, intensifying pressure on Private Equity funds to generate value through more active strategies focused on operational and revenue enhancements in their portfolio companies. In this context, add-on mergers and acquisitions accounted for 40% of total private equity deal value, consolidating their position as a key driver of returns.

Debt costs improved gradually, leading to a rise in the value of new credit issuances for private equity-backed companies. However, global dry powder declined by 11% in the first half of 2024, standing at $2.1 trillion, reducing the inventory to 1.89 years.

Tomeu Palmer, Partner at McKinsey and Leader of the Private Equity & Principal Investors practice in Iberia, states: “For private equity managers, focusing on value creation through operational and growth levers has never been more important. Entry multiples have reached historical highs and holding periods are longer, making operational optimization and growth essential for delivering strong returns.”

New Dynamics in the Secondary Market

The secondary market has become a significant additional liquidity source for LPs, with a 45% increase in transaction value. This growth has fueled LP interest in seeking liquidity beyond distributions, as well as in GP-led secondaries through the creation of continuation vehicles as a strategy for portfolio management. In total, secondary transactions reached $162 billion—the highest level on record.

Meanwhile, middle-market funds were the only ones to maintain stable fundraising levels amid widespread declines. Large funds failed to grow for the first time in three years, while smaller and newly launched funds faced greater challenges, with longer fundraising periods and lower volumes. Nonetheless, LP confidence in the Private Equity segment remains strong, with 30% planning to increase their allocation to private equity over the next 12 months, according to McKinsey’s global LP survey.

“The secondary market has gained unprecedented relevance, reaching a record-breaking transaction volume of $162 billion. More than half of this total was driven by LP-led transactions, showing that investors have found this mechanism to be an efficient way to reallocate capital and manage liquidity. Moreover, the GP-led segment also reached record figures, with 84% of these funds channeled through continuation vehicles,” says Joseba Eceiza, Senior Partner at McKinsey and Leader of the Private Equity & Principal Investors practice in Iberia.

GPMR Report Highlights

Global fundraising fell by 24% to $589 billion, marking the third consecutive year of decline. Transaction activity rebounded by 14% to $2 trillion, the third-highest figure ever recorded in the sector.

For the first time since 2015, distributions to investors exceeded capital contributions, easing liquidity pressures. Buyouts led fundraising efforts and achieved the highest internal rate of return (IRR) in 2024, with a significant increase in transactions exceeding $500 million.

Venture capital experienced a drop in both the number and value of deals, reflecting a decrease in momentum in that segment. Growth equity showed relative stability, although it was affected by investor caution and tighter debt conditions.

The financing environment improved with lower costs and increased issuance value for new private equity-backed debt. Global dry powder fell by 11% in the first half of 2024 to $2.1 trillion, reducing inventory levels to 1.89 years.

A global LP survey revealed that 30% of respondents plan to increase their private equity allocations over the next 12 months, indicating continued confidence in the asset class. Large-scale transactions (over $500 million) increased by 37% in value and 3% in volume, highlighting a growing preference for larger deals.

The rise of the secondary market and a higher number of exits by financial sponsors reflect a more sophisticated approach to portfolio and liquidity management strategies.

William López, New Head of Europe and Latin America at Jupiter AM

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William Lopez head Europe Latin America
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Jupiter Asset Management has announced the appointment of William López as the new Head of Europe and Latin America. Until now, López served as Head of Latin America, Iberia, France, and US Offshore. With this internal promotion, he expands his responsibilities in response to a broader review of the firm’s approach in the EMEA region.

According to the firm, US Offshore will remain under his responsibilities. The appointment is intended to further advance the firm in some of its key international markets, as well as to strengthen its focus on managing cross-border key accounts, working closely with the existing sales teams in each market.

One such team is the Iberia team, led by Francisco Amorim, Head of Business Development for Iberia at Jupiter Asset Management since fall 2024. The team also includes Susana García, Sales Director, and Adela Cervera, Business Development Manager. “Jupiter’s team in the Iberian region works very closely with William to drive business growth in this market, aiming to optimize sales capabilities and foster commercial momentum,” the firm explained.

Crypto Assets Sneak Into the S&P 500 and Break a New Barrier

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On May 19, 2025, Coinbase will officially be added to the S&P 500, becoming the first major crypto platform to join the world’s most iconic stock index. For experts in the crypto space, this milestone marks an unprecedented level of institutional validation for the digital asset sector.

“This is not a symbolic gesture but a structural confirmation: Coinbase has met the rigorous standards for stability, liquidity, and profitability required by the index committee, which only admits well-established companies from the U.S. corporate elite,” says Dovile Silenskyte, Director of Digital Assets Research at WisdomTree.

Coinbase’s inclusion coincides with a moment of strong momentum in the market: Bitcoin has surpassed $100,000, and altcoins such as Solana, Ether, and XRP are seeing significant capital inflows. “This reinforces renewed investor interest in the crypto ecosystem, and inclusion in the S&P 500 means Coinbase will begin channeling passive flows from the trillions of dollars tracking this index,” adds Silenskyte.

In the first week of May, Bitcoin surged past $100,000 and is now very close to its all-time high of $110,400. “Altcoins also rallied, in some cases even outperforming Bitcoin. Ethereum, for example, gained 28% against Bitcoin last week, driven both by the trade agreement and the successful rollout of the long-awaited ‘Pectra’ upgrade on the Ethereum mainnet. On the more speculative end of the market, memecoins posted even steeper gains, in some cases up to 125%,” notes Simon Peters, analyst at eToro.

However, experts remain cautious, and the current rally in crypto assets comes with nuances. For example, Manuel Villegas, Next Generation Research Analyst at Julius Baer, points out that Ethereum is not to silver what Bitcoin is to gold. “Their fundamental drivers are very different. In the short term, volatile —and noisy— macroeconomic conditions may obscure these distinctions, causing Ethereum to behave like a high-beta version of Bitcoin, but in the long run, each token’s fundamentals will prevail. Flows into Ethereum ETFs have been minimal —at best—. At the same time, we clearly see institutional interest in collateral management and stablecoins, where significant activity may concentrate on Ethereum. Meanwhile, its supply remains inflationary, as network activity is still limited,” Villegas notes.

The Coinbase Case

Focusing on Coinbase, it’s worth highlighting that the company, which survived the bear market and regulatory pressure of 2022–2023, successfully transformed itself: it cut costs, diversified revenues into areas like staking, custody, and blockchain infrastructure, and posted GAAP profits in 2024, which cemented its eligibility.

“This inclusion accelerates the institutionalization of the crypto world and removes barriers for traditional investors, who now see Coinbase as a legitimate gateway to the sector. It also sends a clear signal to traditional financial firms: Wall Street is no longer watching from afar—it is participating, allocating capital, and gaining exposure —even passively— to crypto. What was once marginal is now an integral part of the global financial architecture. Crypto assets are no longer knocking on the system’s door — they’ve been handed the keys,” concludes Silenskyte.

Bull Market

Current market conditions are dominated by macroeconomic and geopolitical factors, suggesting that volatility driven by external events will remain present. As for this asset class, crypto regulation in the U.S. and the UK is expected to remain one of the most relevant drivers throughout the rest of the year, with stablecoins being the key issue in the U.S. and spot ETFs the top priority in the UK.

According to Julius Baer, the crypto market’s rally reflects an improvement in risk sentiment, driven by the easing of trade tensions between the U.S. and China. Silenskyte explains that Bitcoin’s price increase is fundamentally based on its scarcity, with institutional demand outpacing supply. Meanwhile, due to differing fundamentals, Ethereum is likely to continue diverging from Bitcoin in the long term, despite currently being influenced by similar macroeconomic trends. “Regulatory developments in the U.S. and the UK will be key factors shaping the market going forward. Investors should act with caution, as macro-driven volatility will remain,” she notes.

In their view, sentiment in the crypto market appears to have shifted significantly, in line with improved sentiment across financial markets following signs of easing U.S.–China trade tensions. “That said, both Bitcoin and Ethereum have also rallied due to multiple acquisitions happening in the background, among which Coinbase’s $2.9 billion acquisition of the non-listed options trading platform Deribit marked a turning point in the pause in crypto sector M&A activity,” concludes the Julius Baer analyst.

Trade Uncertainty: Have We Hit the Ceiling?

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Markets appear to have breathed a sigh of relief following the truce agreement between Washington and Beijing, which includes a reduction in tariffs on Chinese exports to the U.S. from 145% to 30% for a period of 90 days. “The news that China and the U.S. have rolled back policies that, in practice, amounted to a trade blockade between the two countries has been warmly welcomed by the markets. Investors are hopeful that this three-month window will be used to negotiate a lasting agreement that, while unlikely to remove all tensions stemming from strategic competition, at least provides a more predictable environment for companies,” says Sean Shepley, Senior Economist at Allianz Global Investors.

According to experts, markets gained ground, led by cyclical sectors. “In the U.S., inflation stability offered slight relief, though the rise in durable goods prices was not fully offset by the slowdown in service inflation. In Europe, cyclical sectors such as automotive rebounded, though sector rotation began to show signs of fatigue by the end of the period, with defensive sectors making a comeback. Investors are now waiting for a new catalyst, as the good news appears to be already priced in,” summarizes Edmond de Rothschild AM.

According to the firm’s analysis, U.S. economic data for April have yet to reflect the impact of the increased tariffs, either in prices or consumer spending. “The Consumer Price Index (CPI) for the month stood at 2.3%, so the anticipated acceleration has not yet materialized, not even in goods. Services continued to ease. Meanwhile, falling oil prices helped slow energy and food inflation. The Producer Price Index (PPI) showed imported goods prices rising slightly from 2.3% in March to 2.5%,” they note.

With PMI releases still pending this week, analysts at Banca March believe market attention in the U.S. will focus on negotiations over the tax reform promoted by President Trump. “According to House Speaker Mike Johnson, the proposal could go to a vote next Monday. The new law gains relevance after Moody’s downgraded the U.S. credit rating. Market attention will also be on Treasury auctions, particularly a $16 billion 20-year bond issue scheduled for Wednesday,” they explain.

The Truce Between Washington and Beijing

In the view of Paolo Zanghieri, Senior Economist at Generali AM (part of Generali Investments), the unexpected and swift agreement to temporarily de-escalate trade tensions between China and the U.S. shows there is a sort of “Trump option,” even if the exercise price is higher than expected. “Following the truce, we have revised our growth forecasts for the U.S. and the eurozone to 1.6% (from 1%) and 1% (from 0.9%), respectively, and reduced our forecast for Fed rate cuts from three to two by year-end. In terms of asset allocation, we have strengthened our preference for investment grade bonds while maintaining a slight overweight in equities. The peak of uncertainty has passed, and trade protectionists no longer seem to hold the upper hand in the U.S. administration—but caution is still warranted,” explains Zanghieri.

He first points out that the truce with China is temporary, with the suspension of punitive tariffs set to expire on July 8, though he expects it to be extended until the U.S. reaches agreements with key trading partners. “This extension, while welcome, would not fully resolve the uncertainty that continues to hinder corporate capex planning,” he adds.

Second, he notes that the universal 10% tariff and the 25% tariffs on steel, aluminum, automobiles, and auto parts remain in effect, with few exemptions, which will impact both growth and inflation. “U.S. trade authorities are still assessing potential security threats from imports of semiconductors, pharmaceuticals, critical minerals, and commercial aircraft, among others, which could trigger new sector-specific tariffs,” he explains.

Lastly, Zanghieri highlights that the only near-finalized deal—with the UK—has very limited scope and includes provisions aimed at excluding China from British supply chains in strategic sectors. “Beijing would strongly oppose this becoming a standard feature of all trade agreements,” he concludes.

Navigating the 90-Day Pause

In the view of Andrew Lake, Chief Investment Officer and Head of Fixed Income at Mirabaud Asset Management, the rhetoric may sound familiar, but this latest chapter in the tariff saga comes with a notable shift: “The real negotiations are not between the United States and its trading partners, but between the White House and the U.S. bond markets.”

According to Lake’s analysis, a subtle yet significant change has emerged in recent weeks: Trump appears far less reactive to stock market volatility than during his first term, when he often measured his success by the performance of the S&P 500. “This time, the key indicator is U.S. funding costs. He wants lower Treasury yields, lower interest rates, and a weaker dollar. When Treasury yields started to break down in April, the tone changed. Now it is the bond market—not equities—that seems to be driving policy adjustments,” they explain. In Lake’s view, with most of the 90-day pause still ahead, markets remain optimistically positioned, buoyed by news of deals with the UK and China.

For Lake, the real question is whether financial markets, encouraged by optimism over tariffs, can look past current data and focus instead on the potentially better economic expectations now being priced in for the second half of the year.

“Clearly, we are in a worse position than at the start of the year, with 10% now seemingly the minimum tariff rate, but that is still much better than the situation just a few weeks ago. Doubts remain, but if this is now the ‘new normal,’ then we would expect agreements with other major trading partners to follow in the coming months. As we return to a ‘wait-and-see’ mode, our positioning remains cautious. Markets are rising on narrative, not fundamentals, and we have been reducing risk during these rallies. We prefer rotating into high-quality credit, where spreads have widened to levels we consider ‘recessionary.’ We are building exposure gradually at attractive entry points,” he concludes.

86% of Managers Will Increase Use of Alternative Data in the Next Two Years

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Asset managers plan to further increase their use of alternative data for research and analysis. Specifically, they are showing interest in emerging data types such as geolocation and consumer spending data. These are among the findings highlighted in the latest global report produced by Exabel and BattleFin.

The study, conducted with investment managers and analysts working at fund management firms overseeing a total of $820 billion in assets under management, found that 86% expect to increase their use of alternative datasets over the next two years. All data categories are expected to see increased demand, with 51% forecasting a drastic rise in the use of geolocation data over the next three years, and 50% anticipating significant growth in the use of consumer spending data.

The Exabel report, “Alternative Data Buy-side Insights & Trends 2025,” revealed that all surveyed managers and analysts in the U.S., U.K., Singapore, and Hong Kong currently use alternative data in some form. Nearly all respondents (98%) agree that traditional data and official figures are too slow to reflect changes in economic activity.

Consumer spending datasets are considered the most likely to provide a significant informational edge in the near future, according to the study. About 75% of respondents selected consumer spending data, compared with 50% who chose Natural Language Processing (NLP) and sentiment analysis, 45% who opted for social listening, and 43% who selected employment and labor mobility data. Only 7% chose satellite data.

The study also revealed that investment managers and analysts have developed experience in using alternative data: 61% said they began using it between three and five years ago, while nearly one in ten (9%) have used it for more than five years. Around 28% started using it between one and three years ago. Overall, their experience with these data sources has been positive, with 87% rating the process of using alternative data as good or excellent.

In response to these findings, Andreas Aglen, President of Exabel, stated: “Institutional investors have embraced alternative data as a key source of differentiated insight, and demand for alternative data as a critical component in generating alpha continues to accelerate. It is now even more evident that alternative data has become mainstream, serving as a vital source of information for investment managers worldwide.”

The following table shows fund managers’ forecasts for rising demand across different types of alternative data over the next three years, with all categories projected to grow.

Market Risks and Uncertainty Do Not Diminish the Appeal of Dividends

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According to forecasts from the latest Janus Henderson Global Dividend Index, dividends could grow by 5% in headline terms this year—a projection that would bring total payouts to a record high of $1.83 trillion. “Underlying growth is likely to be closer to 5.1% for the full year, as the strength of the U.S. dollar against numerous currencies slows overall growth,” the asset manager explains. However, the current environment of uncertainty and slower economic growth is prompting investment firms to reflect on what might happen with dividends this year.

BNY Investments notes that we are operating in a world undergoing deep structural changes, where inflation is likely to remain elevated and interest rates are no longer near zero. “Those ultra-low rates were a historical anomaly, a response to the financial crisis, but they do not represent the norm. As inflation persists, we should expect rates to stabilize around 3% to 5% in the long term,” says Ralph Elder, Managing Director for Iberia and Latam at BNY Investments.

In this regard, he believes this shift also has a geopolitical dimension: “We are moving from what we used to call the ‘peace dividend’ after the Cold War to a new era of rearmament. The global economy is fragmenting, shifting from globalization to regional blocs and from free trade to more protectionist policies. All of this contributes to greater uncertainty and structural inflation.”

The Role of Dividends
In this context, Elder recalls that dividend income has historically been the most consistent driver of total returns in equity markets, except during highly unusual periods such as quantitative easing, when artificially low interest rates distorted valuations.

“Looking at long-term data, dividend reinvestment dramatically improves outcomes. If you had invested $1 in 1900 and simply followed the market, today you would have approximately $575. But if you had reinvested dividends year after year, that figure would exceed $70,000. That is the power of the compounding effect of dividends over time,” Elder points out.

He argues that in a more volatile, inflationary world with higher interest rates, dividends can provide stability and act as a buffer. “They help smooth the investment journey and will continue to be an essential component of equity returns going forward,” he emphasizes.

This view is also shared by Viktor Nossek, Director of Investment and Product Analytics at Vanguard in Europe: “Dividends remain a fundamental component of long-term equity returns. Since 1993, the FTSE All-World Index has risen nearly 1,150%, with 586 percentage points of that increase attributable to reinvested dividends. It’s a trend that will likely gain importance, especially in a market environment with greater uncertainty and stagflationary tendencies.”

The Impact on Dividends
Now then, how do recession risks affect earnings per share (EPS)? According to DWS, recessions with higher inflation rates have historically had a smaller impact on the S&P 500’s earnings per share (EPS) than deflationary recessions. Their analysis shows that the average decline in S&P 500 EPS during recessions has been 20%, from the peak to the trough of earnings over a four-quarter period, with results since 1960 ranging between 4% and 45%. The asset manager notes that although deeper recessions tend to lead to more pronounced EPS declines, the inflationary environment also plays an important role.

David Bianco, Chief Investment Officer for the Americas at DWS, notes that in recessions with inflation above 4%, the impact on S&P EPS is smaller than what would be suggested by the contraction in real GDP. “This is due not only to high inflation driving nominal sales growth but, more importantly, to the fact that—unlike during severe disinflation or deflation—recessions with high inflation can help avoid rising financing costs for the financial sector; limit losses from corporate inventory liquidations; prevent consumers from further delaying purchases in anticipation of falling prices; support commodity prices and demand for related capital goods; enable large companies to implement price increases; and limit asset write-downs that negatively affect reported EPS,” explains Bianco.

In the long term, Bianco expects S&P 500 companies to absorb about one-third of the tariffs ultimately implemented by the Trump administration, which he estimates would impact S&P net earnings by 3.5%, or approximately $10 per share. “Our revised S&P EPS forecasts for 2025 and 2026 are $260 and $285, respectively, assuming slower growth and weak output, but no deep U.S. recession or sharp decline in the value of U.S. assets. We also include a $5 foreign exchange gain in the S&P EPS, as we expect a weakening of the U.S. dollar going forward,” he concludes.

Dividends in the First Quarter
In the first quarter of 2025, global dividend distribution volume reached $398 billion, representing a 9.4% increase compared to the same period the previous year. Although growth remains robust, it is significantly lower than the 15.3% rise recorded in Q4 2024.

According to Vanguard, these figures are an early indication that global uncertainties are increasingly weighing on corporate confidence, although the 12-month global dividend distribution volume remains at $2.2 trillion for the year.

“Dividend payouts in 2024 hit record levels. And although distributions continued to rise in Q1 2025, the early effects of potential tariffs are becoming evident. Declines were primarily observed in Asia-Pacific and emerging markets (excluding China); in addition, there were dividend cuts from consumer goods companies in the U.S. (down $5.8 billion year-on-year) and China (down $2.3 billion year-on-year). These losses were offset in the first quarter by dividend distributions from North American financial and technology stocks,” notes Nossek.

While Viktor Nossek, Director of Investment and Product Analytics at Vanguard in Europe, acknowledges that China will continue to drive dividend growth, North America remains the largest payer. “Globally, the dividend distribution landscape is uneven. Japan saw an 18% increase, North America 4%, the U.K. 1%, and Europe 0%. Emerging markets, excluding China, recorded growth nearly 7% lower than the previous year, while companies in the Pacific region, excluding Japan, reduced payouts by 14%. Despite China’s exceptional interim dividend, North America remains the largest dividend payer, with around $191 billion in Q1, followed by emerging markets ($74 billion), Europe ($51 billion), and China ($38 billion),” he concludes.