The Credit Edge by Bloomberg Intelligence
Goldman Tells Credit Investors to Buy Cheap Hedges
Feb 13, 2025
Lotfi Karoui, Chief Credit Strategist at Goldman Sachs, shares his expertise on navigating the current credit market landscape. He emphasizes the unique opportunity for credit investors to hedge against losses due to low costs. Despite expensive valuations, he remains optimistic about corporate debt, citing strong demand paired with limited supply. The discussion also highlights remarkable value in mortgage-backed securities and potential opportunities in the European bond market, addressing risks linked to defaults and M&A activity.
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Quick takeaways
- Goldman Sachs emphasizes the strategic advantage of using low-cost hedging to protect against potential losses in a volatile market.
- Despite rising geopolitical tensions, there is strong corporate debt market demand, particularly for mortgage-backed securities and single-name opportunities.
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