In this note, we take a look at the current corporate credit market impact, the effects of recent Federal Reserve policy response and the best course of action we see for investors moving forward.

HY Bonds and Senior Secured Loans each endured their worst month since 2008, ending down -11.76% and -12.37%, respectively, as the global rout in risk assets continued. Historically, credit markets have been resilient, performing well following sell-offs and rewarding investors for buying in at or near current spread levels.

COVID-19 impacts on corporate credit markets

Record-setting volatility? Our chart plots the S&P 500’s top 20 daily gains and losses and reviews recent swings in investor sentiment.

In this research note, we discuss what happens when many traditional sources of portfolio diversification fail, and how liquid alternative funds may offer a compelling case for diversifying exposure.