JPMorgan Chase & Co. has continued its winning streak as
No. 1 in Institutional Investors All-America
Fixed-Income Research Team ranking for an eighth straight
Bank of America Corp. came in second, while Wells Fargo
& Co. took third and Barclays placed fourth. While the
firms positions were unchanged from 2016, there was
movement elsewhere in the rankings. Citigroup rose one spot to
No. 5; Goldman Sachs Group fell two places to sixth, after
tying Barclays last year for fourth.
The rankings are based on questionnaires that II
sent to bond and credit specialists at asset management firms
around the world, with input from more than 1800 portfolio
managers and buy-side analysts overseeing an estimated $9.9
trillion in U.S. fixed-income assets. They selected the best
firms in high yield, investment grade, and economics and
JPMorgan is complete in terms of covering all
geographies and all sectors in fixed income, John
Normand, the firms head of currencies, commodities and
international rates research, said in a phone interview.
That combination of being specialized, but also being
able to highlight cross-market themes, distinguishes the
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As voters ranked the top analysts, two major themes stood
out: the political uncertainty in the U.S. and policy reforms.
Analysts that made IIs list provided investors
with insight into last years surprising U.S. presidential
election while helping them navigate concerns surrounding
rising interest rates.
Investors are closely tracking the Federal Reserves
interest-rate policy, particularly the speed of its rate hikes,
which have been slow since the 2008 financial crisis, according
to interviews with several analysts.
Theres an important debate going on at the
moment about whether the Federal Reserve is pursuing the
correct plan for monetary policy, said Ian Lyngen, whose
team at BMO Capital Markets topped the economics and strategy
category for technical analysis and U.S. rates analysis.
Spreads have narrowed in the U.S. fixed-income market.
In investment-grade fixed income, were seeing a
tight market thats been grinding higher, said Doug
Karson, an analyst at Bank of America Merrill Lynch, who ranked
first for his high-yield and investment-grade coverage of the
auto sector, investment-grade manufacturing and
Its due to these large inflows in bond funds and
ETFs, Karson said of lower borrowing costs for
investment-grade companies. That is creating demand for
Its also been a good time to be a borrower in the
high-yield fixed-income market.
The high-yield financials sector has benefited from
investors increased risk tolerance, prompting
outperformance and a flurry of new issues this year, said
Mark Hammond, a Bank of America Merrill Lynch analyst covering
high-yield debt in the financial services sector.
The potential for tax reform is another area of focus for
investors, according to James Dunn, a Wells Fargo analyst who
earned the top spot for investment-grade coverage of aerospace
and defense, basic industries, and manufacturing and
Were all watching for tax reform, Dunn
said by phone. The question is, can Trump successfully
get some tax reform done?
Money markets are also being watched by analysts and
investors after the Securities and Exchange Commission made
regulatory changes last year to help prevent financial
instability. The SECs new rules put tighter restrictions
on who can invest in retail money market funds.
Money market fund reform sounds boring, but it was
undoubtedly one of the biggest stories in fixed income this
past year, Alex Roever, a fixed-income analyst at
JPMorgan, said in an email. Roevers fixed-income team
clinched the top spot in the economics and strategy ranking of
analysts and teams.