In Q2 2022, US CLO tranches were not immune from the macro volatility and broader market sell-off.
Risks are rising: the Fed must thread a narrowing needle-eye to stop inflation without causing a recession.
Big data is fueling, informing and empowering businesses globally.
In Q2 2022, US CLO tranches were not immune from the macro volatility and broader market sell-off. Given the high correlation to loan market dynamics, especially at the lower Mezz levels, CLO tranches delivered negative returns* across the board at at -1.42%, - 3.05%, -3.97%, -5.85%, -6.94%, -8.6% for AAA, AA, A, BBB, BB and B rating cohorts, respectively.
These are the six major themes influencing positioning across our fixed income portfolios for the second half of 2022.
Should higher risk-free rates and wider risk premia change the investment approach of balance sheet investors? No…and yes.
Embracing Uncertainty: Navigating Structural Economic Forces Requires Improving the Tools in Your Investment Portfolio
As investors face heightened inflation risk and other uncertainties, look beyond traditional investment buckets to capture alternative sources of returns.
Now that yields have reset higher, bonds are positioned to protect portfolios while delivering higher income.
Floating-rate income and the secured nature of senior loans may provide a valuable defense against both rising rates and higher default risk for investors able to stomach short-term volatility.
We believe Voya’s large cap value discipline, which focuses identifying companies with attractive excess capital yield, is a more dynamic and effective valuation mechanism to drive a value strategy, particularly in today’s market uncertainty.