August 16, 2017
Stock market indexes keep making new highs, credit performance has been strong, and credit spreads keep getting tighter. At the same time, volatility plumbs record lows and central bank policies continue to obscure free market price discovery. In the new edition of our Fixed-Income Outlook, our investment management team explains why a defensive posture is a prudent course of action, and discusses shorter-term, sector-specific tactics to position our portfolios to weather the looming correction. In particular, we believe credit risk assets are particularly at risk of a correction, so we have continued to reduce our exposure to that sector. Our high-yield corporate bond allocation across our Core and Multi-Credit strategies is now at the lowest level since their inception, and we have reduced our positions in lower-rated bank loans and CLO debt.
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FEATURED PERSPECTIVES
Bond yields could fall further as rising fiscal risks get priced in.
A properly diversified credit portfolio should have exposure to both high-yield corporate bonds and bank loans.
The COVID Delta Variant’s Looming Threat to Risk Assets.
VIDEO
Brian Smedley, Chief Economist and Head of Macroeconomic and Investment Research, and Portfolio Manager Adam Bloch provide our macro and markets outlook.
Scott Minerd, Chairman of Investments and Global CIO, discussed his outlook for markets and the economy with CNBC’s Brian Sullivan during the Milken Institute 2020 Global Conference.
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