Mon, Oct 5, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Investors should prepare portfolios for eventual rise in interest rates - Credit Suisse

Thursday, May 10, 2012

Bailey McCann, Opalesque New York: Investors may want to start preparing their portfolios for the impact of a rise in interest rates according to a new report from Credit Suisse Asset Management. Although still muted, the strengthening economy has re-ignited inflation concerns and the report authors caution that investors need to start thinking about repositioning their portfolios now to avoid future potential pitfalls.

In this environment, investors can benefit from an allocation beyond core fixed income, especially at the non-investment grade end of the spectrum, according to John Popp, Global Head and Chief Investment Officer of the Credit Investments Group and author of the paper.

"The Fed’s decision as to when to raise rates next is crucial. A move to higher rates may signal a sustained period of US economic improvement, but a sharp increase could derail the recovery," writes Popp. He suggests trading duration risk for credit risk may be prudent for investors.

The report notes that high-yield bonds offer compelling defensive value based on their present average duration and recent call protection dynamics.

"We believe high-yield bonds and senior loans are attractive alternatives for fixed income investors who are seeking to preserve value and drive incremental yield," Popp writes. Adding investment grade debt may also add yield while mitigating risk according to data presented in the paper.

The report, Beyond the Core: Preparing Portfolios fo......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Performance - Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September, Risky strategy sinks small hedge fund[more]

    Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September From Billionaire stock pickers David Einhorn, Daniel Loeb and Barry Rosenstein on Wednesday told their wealthy investors they lost money in September as market turmoil inflicted more pain on some of America'

  2. Opalesque Exclusive: IRAs represent billions of untapped capital for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva: Retirement accounts might not be the first source that comes to mind for those looking to raise funds, but they may represent billions of untapped capital. Unlike traditional retirement accounts,

  3. Opalesque TV: One way to access market hedge funds in the EU under the AIFMD radar[more]

    Benedicte Gravrand, Opalesque Geneva: While the Cayman Islands, the US and Hong Kong await the pan-European marketing passport to be extended to alternative investment fund

  4. Investing - U.S. biotech bloodbath hits hedge funds but some bargains emerge, Computer-driven hedge funds betting on further stock selloff[more]

    U.S. biotech bloodbath hits hedge funds but some bargains emerge From A seven-day selloff of U.S. biotechnology stocks has hit sector investors - especially hedge funds - hard. But some managers say it was overdone and are already eyeing bargains such as Gilead Sciences Inc

  5. Vilas’ equity long bias hedge fund generates market-beating results[more]

    Komfie Manalo, Opalesque Asia: The Vilas Fund, an equity long bias fund managed by Chicago, Illinois-based Vilas Capital Management, posted five-year annualized returns, net of fees, of 23.47% vs. 15.87% for the S&P 500 Index, including divid