Guy Benstead, a Portfolio Manager for Fixed Income strategies was featured in FA-mag.com highlighting 4 key areas to watch in the credit markets in the second half of 2020.
At peak spreads in March, the market had priced in an implied default rate as high as 50% (current levels imply ~35%). Since then high-yield and investment grade corporate bond issuers have been busy issuing new debt and restructuring existing debt in an effort to provide them with additional liquidity as the economy works though the major recession caused by the COVID-19 pandemic. In addition, state and local governments are experiencing severe shortfalls in sales and income tax revenues and face severe budget challenges as they reach fiscal year end June 30 and plan budgets for 2021. In today’s challenging environment, where can advisors find opportunity for their clients in the fixed income markets?
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