Navigate Volatility. Unlock Opportunity. Active Fixed Income

A common thread across emerging markets is an improvement in their terms of trade, which is helping to strengthen external balances, support currencies and improve the earnings outlook for domestically-oriented sectors. Paul Psaila and Uday Tharar explain.

Strong demand, record issuance and resilient fundamentals helped keep global fixed income markets constructive in May—but tight valuations and rising dispersion mean selectivity remains key. Watch this video to find out more.

Stock prices reflect the value of current earnings and the option to make investments that create value, the present value of growth opportunities (PVGO). We analyze how PVGO as a percentage of price serves as a measure of market timing and find it has some use. Next, we observe that the stocks of companies with low PVGO percentages outperformed those with high percentages. Lastly, a simple analysis suggests the PVGO percentage provided a higher return than the value factor in recent years.