Dalton Gardimam

Brazil – Investment Grade within reach => Brazil’s upgrade by Moody’s to Ba1 puts the sovereign rating just 1 notch away from Investment Grade. Moody’s cited solid growth and structural reforms as key reasons behind their decision. Fiscal is still a relatively weak spot though. However, Moody’s kept positive outlook, which means that if Brazil can streamline its fiscal performance, reducing primary deficits and stabilizing its debt/GDP ratio, there will be further rating upgrades. So, Investment Grade is no longer Sci-Fi. => Brazil’s rating upgrade by Moody’s is just one of many positive rating actions this year – the share of upgrades keeps rising (see chart below), hopefully reflecting better fundamentals and institutions in EM.

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City Different Investments is known for finding compelling opportunities that may lie off the beaten path of Wall Street. Last week we caught up with our intrepid portfolio manager Vin Walden, on the ground in Brazil, to discuss an idiosyncratic investment idea he sees there. #investments #globalequity #stocks Postcard From Brazil https://hubs.la/Q02LxWG20

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"Dynamic Asset Allocation with Asset-Specific Regime Forecasts": "Our framework leverages both unsupervised and supervised learning to generate tailored regime forecasts for individual assets... Results consistently show outperformance across various portfolio models." https://lnkd.in/d9cMd428

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Save the Date: October 15 Join Pilar Gómez-Bravo, MFS co-CIO of fixed income, as she explores the best opportunities across the fixed income universe and more: •how to balance the macro and geopolitical drivers ahead •what central bank rate cuts mean for duration positioning •how the easing cycle may impact credit drivers and fundamentals •reasons for optimism in fixed income bit.ly/3XQah4X.

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"Asset Pricing with Cognitive Biases and Deep Learning": "Biased expectations can explain two central puzzles in the asset pricing literature: the equity premium puzzle and the excess volatility puzzle." https://lnkd.in/euFNTFM7

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Why short duration high yield? In recent years, record-high new issuance and refinancing activity pushed down coupons and interest expense – and pushed out maturities. Today, this adds up to an even more compelling yield-to-duration trade-off. https://lnkd.in/eMNTPC2f The linked content is intended for qualified institutional investors and/or financial professionals only.

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Our latest on the End of Disinflation in Latam. Macro divergence continues across the world!

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City Different Investments is known for finding compelling opportunities that may lie off the beaten path of Wall Street. Last week we caught up with our intrepid portfolio manager Vin Walden, on the ground in Brazil, to discuss an idiosyncratic investment idea he sees there. #investments #globalequity #stocks Postcard From Brazil https://hubs.la/Q02Ly62c0

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Paper: "Systematic tail risk [of assets]... proxied by a generalized tail dependence coefficient... is compensated with an economically sizeable and statistically significant premium." https://lnkd.in/e4CKna3Y

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𝗧𝗵𝗲 𝗡𝗕𝗜𝗠 𝗠𝗶𝗹𝗸𝗲𝗻 𝗧𝗲𝗮𝗺! 💪 Just back from interesting days at the Milken Institute Global Conference in Los Angeles. Together with Pedro Furtado Reis, we engaged on various topics, including balancing risk, return and responsibility and the future of active fund management. Great to be a part of these discussions and bringing Norges Bank Investment Management's views into the debate.

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City Different Investments is known for finding compelling opportunities that may lie off the beaten path of Wall Street. Last week we caught up with our intrepid portfolio manager Vin Walden, on the ground in Brazil, to discuss an idiosyncratic investment idea he sees there. #investments #globalequity #stocks Postcard From Brazil https://hubs.la/Q02Ly20Z0

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Every act has its consequences.

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Emerging Markets’ bonds spread has been recently widening because of the inclusion of Venezuela’ s debt in the index. But nevertheless it appears historically cheap against US HY. US exceptionalism, US elections, ample FED’s balance sheet supporting large fiscal expansion and ultimately US growth, all good reasons, now largely priced in. We prefer now to look a bit more constructively to EM to find value. This is the advantage of investing in Multi Asset funds.

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Since early June, Trump has been polling as the most likely candidate to win the 2024 presidency. After a disastrous July, Biden dropping out of the Presidential race arguably is a boost for the Democrats. Kamala Harris is a better candidate, in my view, and may gather momentum. However, the statistical likelihood of a Trump presidency has changed little. And so, the key question for Emerging Market investors remains: What are the consequences of a second Trump presidency for EM assets? Read my thoughts in Ashmore’s latest Emerging View: https://lnkd.in/dZiDMxea #EmergingView #USElections #Gepolitics #EmergingMarkets

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nice to see the Latam new issuance market showing activity

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Great literature review on inflation-linked products by Jarrow and Yildirim. Covers bonds, derivatives, pricing models, and empirical findings. Link (open access): https://lnkd.in/df5Pm5BB

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Cross-country equity futures strategies Developing macro strategies for cross-country equity futures trading is challenging due to the diverse and dynamic nature of equity indices and the global integration of corporations. This complexity makes it difficult to align futures prices with country-specific economic factors. Success in cross-country macro trading often requires a focus on differentiating indicators that are related to monetary policy and corporate earnings growth in local currency. Additionally, effective cross-country strategies must involve a broad and diverse set of countries to generate value consistently. We tested five simple, thematic, and potentially differentiating macro scores across a panel of 16 developed and emerging markets. Our findings suggest that a straightforward, non-optimized composite score could have added significant value beyond a risk-parity exposure to global equity index futures. Furthermore, a purely relative value equity index futures strategy would have produced respectable long-term returns, complementing passive equity exposure. https://lnkd.in/eYM-8MTX

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