Conning 2024 Investment Outlook Discusses Key Themes and Areas of Opportunity Amid Slowing Economy, Rate and Inflation Uncertainty, and Geopolitical Concerns
January 18, 2024
HARTFORD, CT – January 18, 2024 – Leading global investment management firm Conning has posted a webinar featuring a panel of investment leaders discussing the challenges and opportunities for investment markets in 2024. The panelists’ observations break through the standard market overview to offer context, perspective and clues as to where insurers may find investment value.
Rich Sega, Conning’s Global Chief Investment Strategist and moderator of the webinar, noted that many of the challenges from 2023 remain. “Things like inflation, recession, geopolitical strife, are still with us, unresolved. If anything, some have gotten worse,” Sega said. “Add to that the high tensions and soaring rhetoric of an election year, not just for the USA but for nearly half the globe,” he added, and the challenges only intensify.
Cindy Beaulieu, Conning’s Chief Investment Officer, noted that the scourge of inflation has not been defeated and believes the U.S. Federal Reserve should maintain higher interest rates for longer. “We do expect a consumer-led recession in 2024,” Beaulieu said, “but if we're wrong and demand remains strong, inflation will be even tougher to bring down.”
Many sources of volatility remain in 2024 and those will likely present opportunities to add value throughout the year, she added, but insurers will likely need to be tactical in this environment.
A careful study of market dynamics can help identify opportunities. Lauren Law, Senior Portfolio Manager with Octagon Credit Investors, a Conning affiliate, said collateralized loan obligation (CLO) markets look promising for investors in 2024.
A number of factors, such as larger banks returning to the CLO market, have led to spreads tightening, she said. “Risk assets have rallied broadly, so we are thinking about risk and return on a relative basis and I believe that CLO tranches continue to compare favorably to comparable assets both on a risk-adjusted basis, where we think tranches look very attractive on a yield basis and fairly valued on a spread basis.” Law sees value from along the AAA to BBB tranches.
Don Townswick, who heads Conning’s equity strategy, also explained the need for careful study of equity markets as at first glance they can be deceiving.
“We believe it's important not to look at the equity market as a monolith. If you do, everything looks expensive and the equity risk premium looks very unattractive,” Townswick said. “But if you take a look at the headlines and then go down underneath the headlines, you can see that there is a significant concentration in the broader equity market.” The equities outside that concentration in fact appear to be very affordable, he added.
To view the webinar, click here.
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ABOUT CONNING
Conning (www.conning.com) is a leading investment management firm with more than $214 billion in global assets under management as of December 31, 2023.* With a long history of serving the insurance industry, Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
*As of December 31, 2023, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited (CHL) and Cathay Securities Investment Trust Co., Ltd. (SITE). SITE is a separate entity under Cathay Financial Holdings Co., Ltd which is the ultimate controlling parent of all Conning entities.
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Media Contacts
Myra Lee
Conning
+1 860-299-2278
myra.lee@Conning.com