European Capital Partners - Bond pain ahead Discover this fund | European Capital Partners
Asset management and fund structuring boutique

Bond pain ahead

Apr 24, 2024

US credit spreads, as measured by the yield difference between investment-grade BAA corporate bonds and the 10-year US Treasury, currently stand at a three-decade low. Historical patterns reveal that such levels of market complacency regarding corporate default risk, coupled with an uptick in interest rates, have historically precipitated increased corporate defaults and a subsequent repricing of risk.

At ECP, our approach is centred on mitigating these risks through prudent investment strategies. We prioritize allocations towards high-quality issuers and maintain a focus on shorter durations, thereby positioning our portfolios to withstand potential market fluctuations.

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