The coronavirus pandemic has brought about a new investment landscape in which some companies and sectors have fared better than others. Significant market dislocations have also created potential opportunities in the higher quality areas of the credit spectrum.

Alongside pockets of weakness in credit markets come pockets of opportunity for active managers who focus on rigorous bottom-up research and careful credit selection.

The pitfalls and opportunities we see in high yield markets highlight the importance of active portfolio management, rigorous credit analysis, and taking a cautious and selective approach.

We believe an active, flexible, multi-sector approach may offer investors better long-term results by focusing on structural opportunities to generate alpha.

In today’s environment, as traditional credit market betas become less attractive, investors should consider tactical allocations to non-core sectors such as bank loans and higher-quality securitized credit.