Frozen, frothy, and everything in between.
The Full Discretion Approach to Credit Selection
During our decades as bond investors, we’ve managed through all sorts of credit conditions.
And we have consistently observed that the market is inefficient at pricing specific risk.
We use repeatable credit selection strategies to capitalize on this persistent inefficiency and drive excess return potential.
Key Views
As of March 2022
- The credit cycle has advanced to the later stages of the ‘Expansion’ phase characterized by higher expected volatility and a greater risk of a downturn scenario. Risk premiums currently appear attractive relative to history, but catalysts for spread tightening appear limited given concerns over persistent inflation and the current geopolitical landscape.
- Bottom-up fundamentals continue to appear favorable given low leverage and high interest coverage in both IG and HY with spreads technically supported by lower expected issuance relative to previous years.
- Negative impacts of the war in Ukraine have yet to materialize in US fundamental data. However, uncertainty remains high with surging commodity prices, supply-chain challenges, and Russian sanctions.
Full Discretion Team
Range of Institutional Strategies and Mutual Funds
The Loomis Sayles Full Discretion team were among those who pioneered multisector investing with a long-term, flexible, benchmark-agnostic approach. The team manages a range of institutional strategies and mutual funds to help meet different investor needs. Each seeks to identify and capitalize on mispricings throughout market cycles using fundamental research and active management.
