JNK - Ken Griffin focuses on credit strategies ahead of expected U.S. recession - report

2023-06-14 12:54:05 ET

Ken Griffin, whose Citadel hedge fund generated a record $16B for investors last year, is boosting credit trading in anticipation of a U.S. recession, according to a media report.

He expects the world's largest economy to slip into a recession next year, and with that, "We'll look at the credit markets as a source of opportunity," he said in an interview with Bloomberg. "Credit should be a more meaningful contributor later this year" and in 2024 for the firm.

His hedge fund is concentrating on the high-yield credit market, with a mix of long and short strategies. In terms of policy, Griffin is expecting the Federal Reserve to boost interest rates once more this year then pause for an extended period.

Citadel's flagship Wellington fund returned 6.1% in 2023 through the end of May, and Citadel's equities, fixed income & macro, commodities, quant and credit strategies all produced positive returns last month, Bloomberg reported , citing people familiar with the matter.

Some relevant U.S. high-yield debt ETFs include SPDR Bloomberg High Yield Bond ETF ( JNK ), iShares iBoxx High Yield Corporate Bond ETF ( HYG ), and VanEck High Yield Muni ETF ( HYD ), High Yield ETF ( HYLD ), and First Trust Tactical High Yield ETF ( HYLS ).

More on Ken Griffin's Views and Investments:

• Griffin thinks near-term generative AI impact is a hype
• Ken Griffin says U.S. recession is matter of when, how hard
• In February, Silvergate Capital perked up after Griffin's Citadel Securities disclosed stake
• Citadel's Griffin chides retail investors for taking down Melvin Capital

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