Fixed Income

Rediscovering credit (or overcoming middle child syndrome)


Mihkel Kase

Mihkel Kase

Fund Manager – Fixed Income and Multi-Asset

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Credit seems to suffer from a financial form of “middle child syndrome”. Offering neither the allure of high returns that come with equities or the security of cash it is often underappreciated in the portfolio construction process. The global financial crisis did little to help its reputation. In this paper, we challenge this thinking. We argue that opportunities abound in this asset class, and more importantly, that a properly constructed credit portfolio is a potent option for investors. Moreover, we contend that credit will be a net beneficiary of the prevailing uncertainty surrounding global public sector debt and heightened equity market volatility.

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