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Andy Sparks
Head of Portfolio Management Research
About the Contributor
Andy Sparks is a Managing Director and Head of Portfolio Management Research. Previously, Andy was responsible for Fixed income Research Strategies. Prior to joining MSCI, he was Head of Product Management at Barclays Capital for the POINT portfolio analytics platform. He had joined Lehman Brothers in 1995, serving in a number of senior positions. Andy has an M.A. in Economics from the University of Chicago and a B.A. in Economics from UCLA.
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Blog posts by Andy Sparks
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BLOG
Something for nothing? Increasing bond duration may not increase portfolio risk
Nov 20, 2019 Andy Sparks , Juan Sampieri
Learn MoreAsset allocators may consider lengthening the duration of their bond portfolios to prepare for a potential recession in the U.S. But could duration extension push risk above target thresholds? Maybe not.
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BLOG
Home bias in fixed income: Has it helped or hurt?
Jul 29, 2019 Anikó Maráz , Andy Sparks
Learn MoreHas global diversification historically helped reduce risk in the fixed-income portfolios of U.S. defined-benefit (DB) pension plans? Our backtests show that globalizing bond allocations would have increased risk measured relative to a liability benchmark. For such plans, home bias in bond portfolios would have reduced active risk over the period of our study.
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A consensus has emerged that the Federal Reserve will lower rates in the coming months, but investors remain uncertain over the timing and magnitude of the cuts. What impact could three rate-cut scenarios have on markets?
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Could the Federal Reserve Board (the Fed) become less independent, with political forces exerting more influence?
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Listen as MSCI’s Andy Sparks discusses potential implications of the US Federal Reserve’s sharply softening monetary policy, and whether the role of central banks has changed.
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Despite the recent rally in the U.S. government bond market, real U.S. bond yields (i.e., nominal yield minus the market-implied rate of inflation) still remain substantially higher than at the beginning of the year. This may be both a blessing and a curse for investors.
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A remarkable calm has settled upon the U.S. bond market, with interest rate and inflation risk now at their lowest levels of the decade. This optimistic sentiment was underscored at the annual Jackson Hole, Wyoming conference where Federal Reserve (Fed) Chairman Powell highlighted that there is “…no clear sign of an acceleration (of inflation) above 2% and there does not seem to be an elevated risk of overheating.”
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For many years now, stock and bond returns have consistently moved in opposite directions. But the timing of selloffs earlier this year in the bond and equity markets combined with inflation concerns and higher interest rates have market participants asking whether the relationship has changed.
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Many investors may have only a qualitative understanding of the ability of passive fund managers to track the returns of a fixed-income index. Our analysis uses tracking error to provide a quantitative measure of the ease – or difficulty – of consistently tracking an index.
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With employment generally strengthening and inflationary pressures rising, fixed income markets are increasingly focused on central banks tapering bond purchases and ultimately retiring their quantitative easing (QE) programs. Key questions now facing institutional investors include: What has been the impact of the QE programs? How much of this impact could be reversed as the programs are eventually wound down?
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Convertible bonds have “bonds” in their name but in reality they are complicated corporate securities with risk characteristics that often have little to do with straight bonds. Are they more like stocks or bonds? And how can investors evaluate and model them?
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With average purchases of €7.8 billion ($8.7 billion) per month, the European Central Bank’s corporate bond buying program (CSPP) has become a major driver in the market. But will the program deliver on a core goal of funneling new lending to the private sector? If not, ECB support for the program could weaken and the program could be scaled back or terminated.
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BLOG
Analyzing Credit Strategies from a Risk and Return Perspective
May 3, 2016 Andy Sparks
Learn MoreUnderstanding the performance of credit portfolios is essential in explaining a strategy’s merits to clients and prospects.
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Asset managers look at both risk and return in their portfolios. However, it is not always so easy to report and analyze risk and performance attribution on the same platform and along the same dimensions. This type of integrated ex‐ante and ex-post analysis can be carried out in BarraOne, MSCI’s multi‐asset class, multi‐currency, risk and performance analysis platform.
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