The stock markets provide a vast array of opportunities for investors, but the credit markets are even more complex to navigate. That’s because any issuing firm could have multiple bonds outstanding with different maturities, bond formats or different places in the capital structure. This quarter we talk about some of the data-analysis tools we’ve developed to help us pinpoint the best opportunities for our clients among all the opportunities available in the market.
Our Credit team uses a disciplined investment process combining top-down and bottom-up analysis. Our top-down analysis looks into the trends and themes that are driving the markets and sectors. Based on this analysis, we determine the level of risk to take in the portfolio and how to allocate it across sectors. Individual security selection is the result of our bottom-up analysis, which involves looking at company fundamentals and taking relative-value positions. We make extensive use of data analytic tools to help us with relative value analysis. Let’s look at how this works.
Read more about the data analytic tools that vastly increase our Credit team’s investment process.