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you ' ve got all these individual securities for one issuer . Whether that ’ s for better or worse , you can argue both , a company can have any number of different bonds ,” he explains . “ It ' s fun sometimes to say this is the security that I think is going to perform the best . It adds another element of challenge that I ' ve enjoyed , and that ' s why I ' ve stuck with fixed income through my career .”
Flying through turbulence The US has had an “ interesting few months ” as Raymond puts it . Despite the threat of a recession looming in the second half of this year , the Federal Reserve ’ s first rate cut is only expected to take place on 18 September and there remains uncertainty around how quickly rates will come down before year end . The activity has sparked concern with many who are now watching the central bank closely in order to price in any associated risk .
Paired with the upcoming election this makes for a heady cocktail , especially given the fact that more turbulence is expected on the horizon . Helming the US business of one of the largest asset managers in the world through such a course is no mean feat . For Raymond , the focus is now on whether the firm should be de-risking , something he intends to achieve through portfolio diversification .
“ I don ' t think the market is
“ I like having it split because it ' s a different product . It ' s different needs for our clients and our fund managers .”
26 // TheTRADE // Q3 2024 fully pricing in the some of the risks along the lines of the Fed . We ’ re a little bit more conservative in our approach right now ,” he says . “ We ' ve largely been focused on whether this is an inflection point in the market and do we need to de-risk ahead of it ? We ' ll probably use a mix of primary and portfolio trades to move that risk quickly frankly . That ' s taking up a lot of the time from a strategic standpoint .”
“ Credit markets have been fairly stable this
“ If you look at it from a top-down standpoint , you can move very quickly in the market with minimal wake using a mix of primary supply , portfolio trades and big chunky portfolio trades all at the same time .”
year . We ' ve seen the range of the US credit index primarily trade in a 10-basis point range . Until recently , we ' ve broken out of that , but the real question is , have we broken out of it or are we just resetting that range a little bit wider ? That ' s the question that the market is going to answer over the next few months here [ the US ] to see what ' s really going to happen .”
“ The other side of that is supply has been much higher than we anticipated . We expected supply to be very high in the first quarter , but all the colour that we were receiving was supply would slow in the second and third quarter . Both quarters ended up with heavier than expected supply . That has weighted on markets as well . What ’ s really key is being nimble in the market .”
Remaining nimble is something that the largest asset managers across the globe struggle with to this day , particularly in times of unpredicted supply . For Raymond , the solution is simple , leveraging different areas of your investment portfolio to ensure you have the option for a quick turnaround when one is required .
“ We used to view large asset managers as these aircraft carriers that would take months and months to shift their positioning . That ' s not the case anymore . If you look at it from a top-down standpoint , you can move very quickly in the market with minimal wake using a mix of primary supply , portfolio trades and big chunky portfolio