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Public Fixed Income

Multi-Asset Credit Investing: Why Now?

November 2023 – 7 min read

In today’s uncertain environment, high yield multi-asset credit strategies look compelling—especially given their strong track record through the cycle and the potential for attractive income.

Investors today are facing a much more complex and volatile investment landscape than that of recent years. From the Global Financial Crisis until very recently, the market largely was characterized by low or negative interest rates, making it difficult for investors to find attractive incoming-generating opportunities without taking on greater credit risk or extending interest rate exposure. Today, while the rate environment has indeed shifted, investors are challenged with other factors such as persistent inflation and fears of low growth or a recession.

Moreover, long-term asset allocation decisions are taken in the context of investors’ intended investment outcomes. For instance, an insurance company may be looking to balance the risk-reward opportunity with regulatory requirements on capital. Meanwhile in the U.K., higher rates—and the resulting higher discount rate that pension funds apply to their future liabilities—have left funding positions looking much healthier than in recent years. As a result, institutional asset owners are re-assessing their overall portfolio composition including their credit exposure.

Against this backdrop, we believe a multi-asset credit approach to high yield investing continues to make sense.

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Scott Roth, CFA

Head of Global High Yield

Chris Sawyer

Head of European High Yield

The document is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This document is not, and must not be treated as, investment advice, investment recommendations, or investment research.

In making an investment decision, prospective investors must rely on their own examination of the merits and risks involved and before making any investment decision, it is recommended that prospective investors seek independent investment, legal, tax, accounting or other professional advice as appropriate.

Unless otherwise mentioned, the views contained in this document are those of Barings. These views are made in good faith in relation to the facts known at the time of preparation and are subject to change without notice. Parts of this document may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this document is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information.

Any forecasts in this document are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Any investment results, portfolio compositions and/or examples set forth in this document are provided for illustrative purposes only and are not indicative of any future investment results, future portfolio composition or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this document. No representation is made that an investment will be profitable or will not incur losses. Where appropriate, changes in the currency exchange rates may affect the value of investments.

Investment involves risks. Past performance is not a guide to future performance. Investors should not only base on this document alone to make investment decision.

This document is issued by Baring Asset Management (Asia) Limited. It has not been reviewed by the Securities and Futures Commission of Hong Kong.

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