Outlooks

Markets face a growing list of uncertainties, but we believe that credit’s strong fundamentals should help the asset class find solid footing.

The solid backdrop for credit sets the scene for compelling returns. It will be a credit-picker’s market, and we look to high yield bonds and senior secured loans as areas of continued opportunity.

Credit markets have been remarkably steady this year and enter Q4 on solid footing. This tight spread environment presents challenges, but the largest risks we see lie outside credit markets.

With the pandemic now (hopefully) firmly in the rearview mirror for domestic markets, a new environment has emerged for high yield bonds and senior secured loans.

It’s been one year since markets bottomed. With the end of the pandemic hopefully in sight, fundamentals improving and economic forecasts robust, we think the backdrop for credit remains supportive.

The backdrop for credit in 2021 looks favorable. However, active management remains key to generating excess returns and navigating volatility amid the continued impact of COVID-19.