What have been the advantages provided by an allocation to corporate credit over time? The third part of this series examines corporate credit’s long-term performance in several ways to determine its ability to serve as the return-seeking allocation in a fixed-income portfolio.
As allocators consider credit when seeking to take advantage of the opportunity offered in the public fixed-income markets, part three of this credit series focuses on the historical performance of corporate credit versus a duration-matched Treasury index alone to uncover:
- Potentially attractive, cumulative excess returns relative to the U.S. Aggregate Bond benchmark, especially for high yield.
- A further breakdown into rolling, five-year periods also suggests surprising consistency.
- An analysis of the information ratios of excess returns across asset classes relative to duration-matched Treasury indexes to capture how investors have been compensated for the underlying volatility of those excess returns.
Author:
Riz Hussain, Investment Strategist, Lord Abbett