Evolution of the Credit Market

Over the past decade, the public credit market has expanded significantly, increasing from about one trillion dollars to over six and a half trillion today. This growth encompasses a wide spectrum, from high-quality, liquid assets to lower-quality options, which offers diverse risk-adjusted return opportunities for investors. The convergence within the investment-grade and high-yield segments has blurred the lines previously defining these categories, leading to a notable increase in the representation of triple-B rated assets within the investment grade. Consequently, investors are encouraged to adopt a more flexible approach to credit allocation to capitalize on these evolving dynamics.