There is always an opportunity somewhere in credits
The credits markets have undergone a metamorphosis in the last decade. As we now appear to be approaching the end of the cycle, spreads are tight. But the market’s size and diversity means there are still opportunities. We zoom in on four sub-asset classes that illustrate this. We also expand on some of the most important elements of our approach and how these help us to avoid the losers.
• The end of the credit cycle is approaching, but there are still opportunities
• Long-term exposure to a range of sub-asset classes can boost returns.
• Strong research, ESG integration and a global market view are key
Today’s credit markets pose quite a challenge to investors. The low yield environment of recent years is unprecedented. Spreads have tightened to a point where it is hard to find value or be adequately rewarded for risk. At this late stage in the cycle, we believe the challenge for credit investors lies in their ability to take advantage of the different attributes of the broad range of sub-asset classes on offer. To take a strategic approach to credits to ensure exposure to those parts of the market that still offer value and diversification benefits over a longer timeframe.