Mon, Dec 11, 2017
A A A
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. News Briefs - Italy's Carige to sell consumer credit arm to Chenavari, Less than a year after hedge fund coup, East Bay drug maker cuts jobs, looks to move HQ[more]

    Italy's Carige to sell consumer credit arm to Chenavari Italy's Banca Carige aims to sell its consumer credit unit to London-based hedge fund Chenavari by Dec. 6 when a vital 560 million euro ($664 million) cash call ends. Genoa-based Carige must comply by the end of the year with Europe

  2. Launches - Ex-BlueCrest team to open over $200m hedge fund, Greg Coffey, a hedge fund star who retired at 41, is eyeing a comeback, Brevan Howard plans Greek funds as bond rally signals revival[more]

    Ex-BlueCrest team to open over $200m hedge fund From Bloomberg.com: A team of traders who left BlueCrest Capital Management earlier this year raised more than $200 million for their own hedge fund focused on Asian stocks, according to a person familiar with the matter. Ovata Capital Manag

  3. North America - Miami could attract hedge funds if SALT deductions axed[more]

    From Law360.com: For years, inertia has been Nitin Motwani's greatest foe in his attempts to lure hedge fund owners in the northeast to Miami, which he has pitched as a tropical low-tax paradise. But with the Republican tax bill proposing to eliminate deductions for state and local taxes, he's sensi

  4. Northleaf Capital Partners closes debut private credit fund on $670M[more]

    Bailey McCann, Opalesque New York: Northleaf Capital Partners has closed its debut private credit fund - Northleaf Private Credit I - on $670 million. The vehicle will invest in private credit transactions in Europe and North America, with a primary focus on lending to private equity-backed compa

  5. Opalesque Exclusive: Credit Suisse Asset Management's NEXT Investors leads $6M Series A round for LUX Technology and Services[more]

    Bailey McCann, Opalesque New York: Credit Suisse Asset Management's NEXT Investors has led a $6 million Series A funding round for LUX Technology and Services, a business and technology solutions provider for the alternative assets industry. The investment will be used to fuel growth of Trans