2Q:2018 Fixed Income Market Review
Global growth remains robust, and central banks around the world continue to unwind what has been very accommodative policy, and that resulted in flatter yield curves across the board, particularly in the U.S. where the Fed hiked multiple times, but even in Europe where the ECB has committed to unwinding their asset purchases by the end of the year.
So while yields went up across the board, they went up less at the long end, which meant that most fixed income returns were flat to slightly down, and there wasn’t a tremendous amount of dispersion. What’s interesting is, in some of the bouts of volatility, whether it was the equity markets in February in the second quarter in the currency markets, most fixed income, particularly credit, was sort of immune from that volatility. The only exception being emerging market debt, where we had some idiosyncratic events, we had some individual countries that went through some turmoil, and that created some volatility and some downward pressure on prices in emerging markets.
Gershon M. Distenfeld thrives on facing challenge, solving problems and putting people with different personalities and different viewpoints together to "make the engine run." When he joined AB in 1998 from a role as an operations analyst at Lehman Brothers, Distenfeld had long been fascinated by the high-yield market, and he led that practice at AB from 2006 to 2016 before assuming responsibility for all of credit. He has been co-head of fixed income since 2018.
In an industry that tends to focus on the short term, Distenfeld's investment philosophy takes the long view, considers a range of outcomes and focuses on the downside. This approach puts process and constant innovation at the forefront, making full use of AB's proprietary technology to mine the insights of fundamental and quantitative research.
"We're constantly reinventing ourselves," Distenfeld says. "We don't just sit still. We adapt to new information so we can find new factors that work."
Distenfeld's eye toward the long view extends to his charitable work with organizations like New Jersey NCSY. This youth organization for disaster relief partners with Habitat for Humanity and NECHAMA to repair homes and lives affected by natural disasters.