Fixed income/credit after rates go up

Hi guys:

was just wondering if I can hear about your views on fixed income/credit after rates go up? Are we at a point in the credit cycle where the last 20 years of bond bull market is about to end and reverse? if so, would fixed income/credit investing become a declining industry? what are your thoughts on this?

Thanks!

Hi Anonymous Monkey, upload your resume and land a job

Members that upload a resume get 2.3x the number of interview invites through the Talent Oasis. Learn more.

Comments (3)

May 25, 2015

Hi,

I think when (or if?) rates go up, there will be much more focus on floating coupon part of fixed income - loans, structured credit etc. However, I would expect the bear market to be much shorter than bull market - rates increase would happen gradually but over years rather than tens of years. On the other hand, I'd say return oriented investors might actually appreciate higher yields and therefore the sector could get a bit more attention.

Certified Asset Management Pro - Learn more.
Learn More

814 questions across 165 hedge funds. 10+ Sample Pitches (Short and Long) with Template Files. The WSO Hedge Fund Interview Prep Course has everything you'll ever need to land the most coveted jobs on the buyside. Learn more.

May 27, 2015

^Seconded. I'd think that rates going up would be good for "new" FI investment, as the higher rate environment starts showing the cracks in equities of companies that rode the low rate wave, money will shift out of equities into newly issued, higher yielding corporate debt.

Certified Equity Research Pro - Learn more.
May 27, 2015

1-Click to Unlock All Comments - 100% FREE

Why do I need to be signed in?
WSO is a knowledge-sharing community that depends on everyone being able to pitch in when they know something.
+ Bonus: 6 Free Financial Modeling Lessons with 1-Click Signup ($199 value)