Fri, Nov 27, 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. Other Voices: Hedge fund marketing and the selling cycle[more]

    By Bruce Frumerman. How long is the selling cycle now? That’s a question my financial communications and sales marketing consulting firm has been asked on a regular basis by hedge fund firm owners and sales people, ever since we opened the doors to our firm in 1987 pre-crash. Wa

  2. People - Solus Alternative Asset Management adds chief strategist from BTIG[more]

    From Daniel Greenhaus joined hedge fund manager Solus Alternative Asset Management as managing director and chief strategist. He will work closely with Chris Bondy, Solus’ chief economist, managing director and executive vice president, said Chris Pucillo, CEO and chief investmen

  3. Opalesque Roundtable: Seeding deal terms can be onerous for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Executives from fund of funds firms, family offices, a placement agent, a private equity firm, and an accounting firm gathered in Connecticut last month for the

  4. Opalesque Roundtable: Family offices flock to co-investment[more]

    Bailey McCann, Opalesque New York: Co-investments have been a hot topic for pension funds in recent years, as they try to move away from high fees and improve transparency. But now, family offices are more readily getting into the mix and establishing in-house deal teams, according to the delega

  5. More institutional investors invest in CTAs compared to last year despite dissatisfaction with performance[more]

    Benedicte Gravrand, Opalesque Geneva: "Despite a strong start to 2015 for CTAs in Q1, commodity market conditions have made return generation difficult for fund managers over much of the rest of the year to date," says Preqin’s November