Income Strategy Update: Seeking Long-term Value In A Gradually Healing Economy

The significant widening of global credit spreads since the start of the COVID-19 crisis has created opportunities for patient investors who wait to be appropriately compensated for risk. Specifically, for corporate pension funds it creates the opportunity to invest in long credit to better match their liabilities and improve the yield on their liability-driven investment (LDI) portfolios, with U.S. and European investment grade (IG) spreads still around 1 percentage point above their 19 February levels.