Fixed Income

Global Credit Cycle Built for Endurance

By Michael Buchanan, Deputy Chief Investment Officer & Robert Abad, Product Specialist
Western Asset

August 2019

Investors continue to debate where we are in the global credit cycle and wonder if the party is about to end. After all, credit spreads have ground tighter over the past few years even as corporate sector leverage has crept higher and as global growth has softened. This is a potentially worrisome mix, many would argue. We recognize that there are a number of signs in credit markets that warrant caution. Still, we maintain our long-standing view that the underpinnings of this cycle are more nuanced than those of prior cycles, and that credit market performance could improve beyond current market expectations. This paper delves a bit deeper into our views, market concerns and implications for portfolio positioning.
Past performance is no indication of future performance.

Legg Mason Asset Management Australia Ltd (ABN 76 004 835 849 AFSL 240827) is part of the Global Legg Mason Inc. group. Any reference to ‘Legg Mason Australia’ is a reference to Legg Mason Asset Management Australia Limited. The information in this article is of a general nature only and is not intended to be, and is not, a complete or definitive statement of the matters described in it. The information in this article does not constitute specific investment advice and does not include recommendations on any particular securities. These opinions are subject to change without notice and do not constitute investment advice or recommendations.