There are many types of credit investments available to investors. These include public and private debt, which trade in public markets. The public type includes securities such as U.S. Treasuries and corporate bonds. The private type is more complicated, and investors should consult a financial advisor to understand the risks involved. The benefits of credit investments are many, and they are an excellent way to diversify your portfolio.
The global corporate credit market has experienced exponential growth in recent years, largely due to global monetary policy driving investors to seek out higher yields. The opportunity set is broad and diverse, and investors can take a long-term, strategic approach to credit investment. However, investing in this type of asset class requires a high level of expertise.
A new alternative asset management model has emerged in the credit investment space. This investment strategy involves partnering with insurers in an effort to increase credit returns. Insurance companies can offer perpetual capital, and alternative asset managers can place illiquid credit assets into the buy-and-hold portfolios of insurers. This allows investors to earn an illiquidity premium on these assets.
The credit market represents a large part of the fixed-income world. It makes up about $13 trillion of the global fixed income universe. An allocation to credit can enhance your return potential, boost diversification, and provide income. It encompasses a broad range of categories and public markets.
