Why bank loans may offer benefits in today’s economic and
The fixed-income landscape is shifting as rates rise and as we press on in the late stages of the credit cycle. Senior loans, also referred to as bank loans or leveraged loans, offer a number of potential benefits in this environment. Loans offer higher return potential compared to investment-grade credit, yet tend to deliver lower volatility than high-yield bonds. Further, loans can mitigate interest-rate risk, while also providing defensive features in a downturn.
The following highlights three aspects of loans that make them a potentially attractive fixed-income allocation today and explores ways investors can access the leveraged loan market.