By Matthew Sheridan & Monika Carlson
Credit barbell strategies are designed to provide protection on the downside, participation on the upside, and efficient income. But with government bond yields at historic lows, can these fixed-income strategies still meet their objectives? We think so.
Credit barbells combine interest-rate-sensitive assets with credit assets in a single portfolio. This approach can help managers get a handle on the interplay between interest-rate risk and credit risk and make better decisions about which way to lean as conditions change.
Credit barbell strategies are effective because they blend asset classes whose