Garden State Shop To Add TIPS

  • 06 Jan 2002
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David Kotok, portfolio manager with Cumberland Advisors in Vineland, N.J., is looking at increasing the firm's Treasury Inflation Protection Security (TIPS) allocation by 10%, or an additional $25 million, within the next few months. Kotok says he will place more emphasis on buying 30-year TIPSs, based on the view that the Treasury's decision to suspend issuance of 30-year bonds will cause long TIPS to trade with a scarcity premium within a year or so. Kotok adds that all TIPSs will rally after Wednesday's 10-year auction but that the price appreciation should be greater on the long end than on the 10-year range TIPS with a premium reaching 30 to 40 basis points.

Kotok believes TIPSs will rally more than conventional Treasuries because the market is currently pricing CPI for the next 10 years at a 1.5% rate, a level Kotok believes to be too low and one that he estimates should more likely be 3-3.5%. He reasons that the market is wrong because a 1.5% CPI level will make the Federal Reserve's preferred inflation measure, the Personal Consumption Expenditure Deflator, zero, a violation of long standing Fed policy. Cumberland has a $250 million bond portfolio with an asset allocation of 50%TIPS, 35% taxable munis, 5% short-term Treasuries, 5% mortgage-backed securities and 5% cash. Kotok would not disclose duration given the portfolio's heavy allocation in TIPS.

  • 06 Jan 2002

All International Bonds

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1 Citi 346,069.71 1350 8.09%
2 JPMorgan 342,066.65 1471 7.99%
3 Bank of America Merrill Lynch 307,117.30 1065 7.18%
4 Barclays 258,537.34 976 6.04%
5 Goldman Sachs 227,890.51 774 5.33%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 BNP Paribas 48,411.81 205 6.53%
2 JPMorgan 46,311.15 105 6.25%
3 UniCredit 40,595.43 182 5.48%
4 SG Corporate & Investment Banking 38,348.83 146 5.17%
5 Credit Agricole CIB 38,097.35 189 5.14%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 14,514.87 63 9.19%
2 Goldman Sachs 13,469.15 66 8.53%
3 Citi 9,971.36 58 6.32%
4 Morgan Stanley 8,572.10 54 5.43%
5 UBS 8,414.70 37 5.33%