NB Global Floating Rate making hay in QE environment

Corporate loan investment company NB Global Floating Rate Income Fund said the loan markets in the US and Europe continued to perform well in the third quarter, as central bankers kept the bond repurchase schemes going .

Corporate loan investment company NB Global Floating Rate Income Fund said the loan markets in the US and Europe continued to perform well in the third quarter, as central bankers kept the bond repurchase schemes going .

In an update on its portfolio, the closed-ended investment company said the most significant changes since the last quarterly fact sheet relate to its more volatile components.

Specifically, the company has chopped its bond positions from 11.6% at the end of the second quarter to 6.7% at the end of September, due to the spread narrowing between loans and bonds, as highlighted in its previous statement.

The company has also reduced non-US exposure, with European assets' share of the portfolio down from 7.4% to 5.1% over the third quarter. NB Global said this is due do the lack of new supply and the decision to bank some profits.

Looking ahead, the group expects to continue to focus more on the US primary markets (i.e. new issues) for the rest of the year, as the current pipeline of deals is very healthy at just over $35bn. In contrast, the European new issue market is effectively closed for the remainder of the year compounds our view.

NB Global likes the US primary market in any case because it believes US companies remain fundamentally strong, churning out decent earnings.

"Whilst secondary opportunities remain, these are more limited at present given the market rally we have seen, but we continue to monitor the situation and will still continue reducing the more volatile segments of our portfolio and taking profits on some lower yielding assets that we bought at a discount. Although our focus is on the primary market we are well aware that market conditions can change quickly, and cognisant of the fact that if we do see a period of volatility in the run up to year end, that this is likely to present significant secondary buying opportunities," the statement concluded.

JH

Recommended

How to invest today? Look to the past, not the future
Investment strategy

How to invest today? Look to the past, not the future

The past few years have seen so many changes to our way of life that many people said we had entered a “new normal”. But as it turns out, the new norm…
18 Aug 2022
A new legal headache for Haleon
Stocks and shares

A new legal headache for Haleon

Haleon, GSK’s former consumer-products arm, spun off last month, has made a dismal debut on the stockmarket.
17 Aug 2022
Persimmon yields 12.7%, but can you trust it to deliver?
Share tips

Persimmon yields 12.7%, but can you trust it to deliver?

With a dividend yield of 12.7%, Persimmon looks like a highly attractive prospect for income investors. But that sort of yield can also indicate a com…
17 Aug 2022
Cineworld faces a bleak future – investors should stay away
Share tips

Cineworld faces a bleak future – investors should stay away

Weighed down by crippling debts and with consumers tightening their belts, Cineworld's future does not look bright, says Rupert Hargreaves. Investors …
17 Aug 2022

Most Popular

Investors should get ready for a political revolution
UK Economy

Investors should get ready for a political revolution

Liz Truss will beat Rishi Sunak, cut taxes, and then shake up the Bank of England, says Helen Thomas
15 Aug 2022
How to protect your wealth as inflation hits new record highs
Investment strategy

How to protect your wealth as inflation hits new record highs

UK inflation has hit a new record high of 10.1%. It's going to hurt, says Dominic Frisby. Here's how you can protect your wealth.
17 Aug 2022
Don’t listen to the doom-mongers – the future is bright
Economy

Don’t listen to the doom-mongers – the future is bright

With volatile markets, raging inflation and industrial unrest, it may feel like things are bad and likely to get worse. But the end of the world is no…
15 Aug 2022