Specializing within credit sub-asset classes

I work for a boutique LO discretionary asset manager as a junior fixed income PM. Given recent turnover and a new strategic outlook, I have the opportunity of choosing which sub-asset class within credit to dive deeper into. While I'm currently a generalist, doing work for funds with IG Credit, HY Credit and financial bonds, I'm expected to choose one of the above as we reorganize our team.

Although I'm most interested in either financial & insurance company bonds as well as HY credit, I feel like both of these asset classes are at the mercy of investor sentiment. You could have decent performance, but so long as your not at a top tier AM and there are outflows from either one of these "nichier" asset classes for a protracted time period, you'll be screwed in terms of AUM and comp.

I dont see this as much being the case for IG credit, although IG credit portfolio management will likely be the first to see a significant headcount reduction as portfolio construction will be more and more quantitatively driven. On the other hand, pressure on fee compression will be stronger for IG products as they become more and more liquid, which could also be a headwind to comp down the line.

I'd be happy to hear your guys' thoughts on which of these asset classes would be most advantageous for a career in discretionary PM.

 

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