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Attractive Valuations in Short‑Dated Investment Grade Credit

johnNjohnN
in The Bullpen
https://www.advisorperspectives.com/commentaries/2018/08/03/attractive-valuations-in-short-dated-investment-grade-credit

Attractive Valuations in Short‑Dated Investment Grade Credit
by Lillian Lin of PIMCO, 8/3/18

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SUMMARY

In short-dated (one- to three-year maturity) U.S. investment grade (IG) credit, supportive technical factors have combined with fundamental strength to create attractively priced entry points.
Short-dated IG bonds have historically tended to offer more stable returns and lower volatility than full-maturity corporate bonds, as well as lower actual default risk. They also tend to be less sensitive to interest rates.
Active credit research, including thoughtful, rigorous analysis of individual issuers and securities, is critical. This remains an environment for selectivity in credit.
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