Which US states have greater GDP than other nations?

Unlike many countries where public infrastructure is planned, financed, construct and maintained by national governments, the majority of US infrastructure is the responsibility of states, cities, counties and public agencies. Each can issue their own bonds, which gives investors opportunities to invest in quasi-sovereign debt from jurisdictions whose economic output rivals that of many countries. This map shows how the individual states’ GDP equals the national GDP of various countries. With sovereign debt yields around the world remaining stubbornly low, higher yielding US municipal bonds can present an attractive, higher yielding, quasi-sovereign option for global investors.

Standish, a BNY Mellon company

Unlike many countries where public infrastructure is planned, financed, construct and maintained by national governments, the majority of US infrastructure is the responsibility of states, cities, counties and public agencies. Each can issue their own bonds, which gives investors opportunities to invest in quasi-sovereign debt from jurisdictions whose economic output rivals that of many countries. This map shows how the … read more

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Emerging Markets: busting the myths

The introduction of India’s first infrastructure investment trust, called IRB, in May underscores the expectation infrastructure spend will be a key driver of the country’s growth over the next few years.

The IRB trust, which holds six toll roads, features a 10-12% yield and it is likely to be the first of many such listings. To put this in context, just 10% of the Indian market’s large cap stocks yield more than 3%.

The government has plans for some US$20bn infrastructure spend on roads but we think trusts like IRB may benefit from more than just increased government spending.

Aviation, for example, is another key focus for the government. In 2016 there were some 150 million domestic flight journeys in India, compared to c900 million in the US and around 500 million in China. Air travel may cost more but it takes around 1/6th the time. As such we expect to see the number of airports increase and they are likely to go private (as public-private partnerships).

Naomi Waistell – Newton, a BNY Mellon company

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The introduction of India’s first infrastructure investment trust, called IRB, in May underscores the expectation infrastructure spend will be a key driver of the country’s growth over the next few years. The IRB trust, which holds six toll roads, features a 10-12% yield and it is likely to be the first of many such listings. To put this in context, … read more

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Why we’re still living through extraordinary economic times

Despite all the recent discussion about rate rises and normalisation of monetary policy, the investment backdrop remains unprecedented. Through their quantitative easing programmes, for example, central banks are now the backstop for the world’s economy.

Added together, the balance sheets of the Bank of Japan, the Bank of England, the European Central Bank and the US Federal Reserve come to some US$14.4 trillion. To put this in some kind of context, the same four banks’ combined balance sheets stood at just US$2.2 trillion as of the 1 January 1999.  This means the balance sheets of central banks have ballooned by more than 650% in under two decades.

The unintended consequences of this kind of intervention by central banks in markets are legion. In fixed income, for example, a full US$8.8 trillion of the world’s bonds trade continue to trade with a negative yield. While this is below the 2016 peak where nearly 30% of the fixed income universe was on a negative yield, we still think it’s staggering to consider how many investors are willing to pay to take on risk.

The potential for rising interest rates, coupled with low and negative yields, makes it all the more important to embrace a new approach to investing.  We see the evolution of the multi-asset investment universe that looks beyond the traditional 60/40 equity/bond split as key. By broadening the investment horizon, we believe we are potentially much better placed to weather the economic vagaries of a still uncertain world.

Paul Flood – Newton, a BNY Mellon company

Despite all the recent discussion about rate rises and normalisation of monetary policy, the investment backdrop remains unprecedented. Through their quantitative easing programmes, for example, central banks are now the backstop for the world’s economy. Added together, the balance sheets of the Bank of Japan, the Bank of England, the European Central Bank and the US Federal Reserve come to … read more

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