Know Your Loans – Why Active Management Matters
A disciplined approach and careful selection can help loan investors avoid potential pitfalls as the economic cycle continues to age.
- No signs of deteriorating fundamentals in late Q4
- Liquidity matters when selecting loans
- Low refinancing rates in 2019 have been good for the bank loan market
- Active management in the bank loans space has its advantages, including buying smaller loans, special situations, and out-of-benchmark selections
- Deep credit research expertise at Loomis, Sayles & Co. and security selection has the potential to add alpha
Bonds may carry one or more of the following risks: credit, interest rate (as interest rates rise bond prices usually fall), inflation and liquidity. Below investment grade bonds may be subject to greater risks (including the risk of default) than other fixed-income securities.