Underweight Food and Beverage Credit

This comes after a year of extremely negative returns of -4.45% compared to -2.81% for index eligible industrials with spread widening in longer duration bonds contributing to the majority of the underperformance.

Retail Sales

While prospective data for manufacturing activity appear to have bottomed out in August and September according to readings from purchasing managers’ surveys, business activity will continue to be sensitive to headlines on trade.

Repo Stress

The rate on overnight repo surged on Monday, 9/16 and remained elevated through the week causing the federal funds rate to rise above the higher end of the Fed’s target range. This spooked market participants as short-term rates were a harbinger for worsening...

A Transition from LIBOR

Due largely to recent LIBOR manipulation scandals, regulators in the US are set to phase LIBOR out by the end of 2021 and replace it with the Secured Overnight Financing Rate (SOFR), pressuring market participants to quickly understand and adopt SOFR (refer to our...

Consumer ABS

Unlike senior unsecured corporate bonds, ABS transactions are structured so senior tranches are able to maintain AAA ratings even if there is material deterioration in fundamentals.