High Quality Short Credit (UK)

Executive Summary

  • High quality, low duration credit strategies provide an important role in investment portfolios as schemes de-risk and move closer towards their long-term funding targets.
  • These strategies can offer a lower expected risk of default, lower volatility and desirable cashflow-matching characteristics.
  • The high quality, low duration credit strategies that we recommend include asset-backed securities (ABS) and shortdated credit.
  • In the current volatile market conditions resulting from coronavirus fears, these offer an excellent opportunity for institutional investors with actively managed bond strategies to gain from the market dislocation.
  • For investors looking to reappraise their credit portfolio, these alternative credit strategies should be considered in combination as an attractive diversified credit proposition.

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