To BBB or not to BBB, that is the LDI Question

Tags:

PDF (1,077 KB)

To BBB or not to BBB

Andrew Catalan, CFA

Andrew Catalan, CFA - Managing Director & Senior Portfolio Manager of the Liability Driven Investing group

Key Concepts

Standish recommends that a liability hedging portfolio include BBB rated issuers for a number of reasons. Consider that BBB rated credits:

  • Are highly correlated with higher rated securities found in discount curves.
  • Can add incremental returns to a credit portfolio.
  • Represent a sizable part of the investable credit universe.
  • Are motivated to maintain or improve credit quality to access capital markets.
  • Provide a spread cushion for event risk relative to higher rated bonds.

Download PDF for full article

Share This Page


RECEIVE ARTICLES BY EMAIL