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High-Yield

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Public BDCs: Patience For Investors, Short For Traders

We are positive Private Credit but currently underweight Public BDCs. Today’s market pricing and sentiment in BDCs are excessively optimistic. Long-term investors should await a better entry point. Traders may find an attractive short. This report also peels back the Public BDC onion and presents over/underweights across individual BDCs via our filtering methodology.

Also included at the end of this report is an updated presentation titled 'Private Credit: Drivers Of The Boom And Understanding Risks On The Horizon,' recently presented at GII’s Private Credit Roundtable in Australia. It features updated charts and additional analysis.

Private Markets & Alternatives by Brian Payne
Junk Bonds Are Ignoring The Rise In Unemployment
Credit spreads continue to price in a Goldilocks scenario. US investment grade and high-yield OAS have tightened 41 and 137 bps from their October peaks, resulting in handsome outperformance by both sectors relative to duration-equivalent Treasuries. …
Daily Insights
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Timing The Breakout In Bond Yields

Our Portfolio Allocation Summary for May 2024.

US Bond Strategy by Ryan Swift
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Recession Postponed

Our Portfolio Allocation Summary for April 2024.

US Bond Strategy by Ryan Swift, Robert Timper
Will HY And IG Spreads Tighten Further?
US Investment grade and high yield spreads have tightened 39 and 133 bps since their October 2023 highs, resulting in the outperformance of both fixed income sectors relative to equivalent-duration Treasuries. Still robust economic growth in the US…
Daily Insights
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Take Profits On Inflation Hedges

Our Portfolio Allocation Summary for March 2024.

US Bond Strategy by Ryan Swift
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Ranking US Spread Sectors In 2024

We rank the US spread sectors in terms of risk versus reward.

US Bond Strategy by Ryan Swift
Tight Credit Spreads Offer Inadequate Protection
The strong H2/2023 rally in global credit markets can be attributed to lower global inflation and the associated reduction in global interest rate volatility. However, our colleagues at BCA Research’s Global Fixed Income Strategy service argue that credit…
Daily Insights
Credit Is Unattractively Priced
US corporate bonds performed well last year with both investment grade and high-yield spreads narrowing in 2023. Indeed, the 12-month breakeven spreads are relatively low – especially in the case of investment grade.  This means that corporates have a…
Daily Insights
The Eurozone's Three Credit Phases In 2024
According to BCA Research’s European Investment Strategy service, European corporate spreads will widen over the coming six months before an attractive buying opportunity emerges in the second half of 2024. 2024 will likely be characterized by three credit…
Daily Insights

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