PRI Podcast: ESG in Credit Risk and Ratings
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Currently, U.S. high yield may offer attractive yields with limited interest rate risk. Longer term, the market may provide a compelling middle ground between core fixed income and equities.
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The Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Fourth Quarter Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Third Quarter Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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The Second Quarter Global Credit Perspectives discusses performance and opportunities for global credit markets by segment.
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By actively seeking differentiated sources of return, an unconstrained fixed income approach like Global Alternative Credit may generate attractive total returns, diversify asset allocations, mitigate risk, and protect against various forms of market volatility, in our view.
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Credit Risk Transfers (CRTs) are a segment of the U.S. mortgage-backed securities market, and is an area gaining interest from investors who want to increase exposure to the U.S. housing market. This paper provides a high-level analysis of the CRT market, including issuance, market size and liquidity, underlying collateral, and valuation.
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We believe an unconstrained, fixed income strategy that invests globally may help uncover value across asset classes, countries, and currencies; a global, multi-sector strategy is an ideal way to balance the search for value with protection against various forms of market volatility.
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With credit markets in the late stages of the credit cycle and interest rates at record low ranges, yield-starved investors have been forced into lower-quality assets and potentially more volatile sectors. Unfortunately, this reach for yield often introduces investors to unwanted, heightened risk, including higher default risk and interest rate risk. Relative to this new backdrop, we believe investing in BB/B-rated credit represents an attractive solution for investors as both a complement to lower-yielding investments or as a replacement for low-quality, high-risk alternatives.
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Given its attractive risk-return profile, we believe global high yield should be considered as a permanent part of an overall asset allocation, even as a surrogate for an equity allocation.
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We believe investors should access emerging markets debt (EMD) through a global high yield manager, rather than a stand-alone EMD allocation or a semi-dedicated allocation within core plus or domestic high yield strategies. This paper examines the differences between approaches and details the growing size of the opportunity in emerging markets fixed income.
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Tracy Chen, portfolio manager at Brandywine Global, examines the value opportunity in collateralized loan obligations (CLOs). Ms. Chen sees the CLO market as an inexpensive asset class among hard-currency credit assets, which are otherwise richly priced today.
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Tracy Chen, portfolio manager of securitized and structured credit at Brandywine Global, explains why the global securitized debt market offers significant opportunities to earn higher yields and alpha. Many institutional investors choose to avoid the opportunities in securitized debt either because a lack of new private-label issuance prevents investment scalability or because the most attractive portions of the market are the most complex and resource intensive to analyze. For these reasons, many portions of the securitized global debt market are under-owned and under-followed, which creates the perfect environment for a skilled investor to generate persistent alpha.
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In the context of historically accommodative monetary policy and suppressed market volatility, traditional credit sectors currently offer thin risk premiums and unattractive nominal yields. To continue earning attractive yields from credit, we believe investors must embrace a more dynamic, benchmark-agnostic, and value-sensitive approach.
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