Insights

CLO tranches had positive total returns in July. Despite modest spread tightening last month, we believe AAA-rated CLOs are still priced at very attractive levels and represent a buying opportunity today for ratings sensitive or more risk-averse investors.

Despite a poor performance in May, we view the floating-rate loan asset class—the shining star within corporate credit so far this year—as appealing, providing potential for price appreciation, as well as a compelling yield profile.

Concerns in May surrounding the ability of corporate profits and consumers to withstand high inflation, rates and tighter policy continue to weighed on valuations.

On a relative basis, bank loans and CLOs again fared better in April than similarly rated investment-grade and high-yield corporate bonds.

Widening spreads and a steep forward curve in March strengthened the already attractive relative value of CLOs.

The Federal Reserve raised rates for the first time in three years and expects six more hikes this year as it tries to aggressively tamp down rising inflation.

We posed four questions for Pacific Funds portfolio managers about today’s fixed-income markets. Here are their answers.

The Fed faces the task of tackling inflation as COVID wreaks havoc on supply chains, without disrupting the U.S. economy

This year will likely be a push and pull between inflation, the Fed and COVID.

When it came to the economy, 2021 made for a wild ride: broken supply chains, spiking inflation, plummeting unemployment, changes in the Fed’s stance, and, despite all this, an estimated GDP growth of 8.7%. Here are 10 charts that we believe best reflect the roller-coaster year.

With the labor market continuing to improve and inflation spiking, Fed officials have moved up their timeline for reducing asset purchases and predict as many as three interest-rate hikes in 2022.