According to Richard Piccirillo, there appears to be a disconnect between current levels of macro risk and the “extreme optimism” apparent among fixed income investors, and only time will tell whether their confidence is prescient or misguided. He believes fluid conditions like these reinforce the need for investors to embrace the flexibility afforded by an active, multi-sector approach to credit markets.
In this video, the co-leader of PGIM’s multi-sector credit team draws on more than three decades of fixed income investing experience to assess current conditions and explain how a multi-sector approach can position investors to capitalise on them. While credit markets move to an an ever-changing mix of influences, a multi-sector perspective enables a consistent focus on finding excess return.
Valuations appear to reflect conditions defined by modestly positive economic conditions, decent fundamental underpinnings, solid corporate earnings, and below-trend delinquencies. At the same time, the fact that much of the uncertainty surrounding the global economic outlook stems from tariffs with unresolved questions concerning their permanence means sudden change can occur on that front at virtually any time.
Against that backdrop, Richard highlights the benefits associated with opportunistic credit selection and the ability to tactically adjust risk to the changing environment, explaining how those attributes apply whether investors choose to employ a multi-sector credit strategy as an alpha generator or a diversified, all-in-one solution. Access the accompanying video for Richard’s entire interview.
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