Marc Stacey, Senior Portfolio Manager for Investment Grade credit, looks at how volatility is creating widening dispersion and opportunities for active investors.
Key takeaways
- Today, it’s not just fiscal orthodoxy that markets are baulking at – it’s stability itself, against a backdrop of policy-driven volatility.
- However, the fundamentals for investment grade credit remain sound, and volatility is creating meaningful divergence between sectors.
- Opportunities are plentiful for active credit investors who employ a flexible, selective approach.
Exasperated by how bond markets were reining in the Clinton administration’s US economic agenda in 1993, political strategist James Carville remarked “I used to think that if there was reincarnation, I wanted to come back as the president or the pope. But now I want to come back as the bond market – you can intimidate everybody.” More than 30 years later, it continues to feel apt.
