The Credit Edge by Bloomberg Intelligence Oaktree Sees Private Credit Stress as Excitement Grows
Jul 3, 2024
Wayne Dahl, co-portfolio manager at Oaktree, discusses private credit stress and excitement in the market. Topics include risks in health care, opportunities in consumer staples, insurance, and securitized credit. Dahl highlights potential spread compression due to excess demand.
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Credit Market Performance
- Credit markets haven't performed as expected, primarily due to high interest rates.
- Diversification across fixed and floating rate assets is crucial for balancing risk and return.
Navigating Credit Markets
- Focus on income-generating assets to mitigate market volatility.
- Consider the trade-off between yield and spread when evaluating credit investments.
Uncertainty and Sector-Specific Stress
- Uncertainty, like regulatory changes in healthcare, can stress markets even without a recession.
- A bottom-up, fundamental approach is crucial for navigating sector-specific challenges.