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.
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