Long Short Credit May Offer All-Weather Protection

Long Short Credit May Offer All-Weather Protection

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Joshua Lofgren
JUN 17, 2021

Explore Strategies

Public Fixed Income

In today’s complex markets, long short credit can be a compelling diversifier to a traditional fixed income portfolio. With a focus on credit fundamentals, downside protection, and liquidity, including long short credit in a broader asset allocation can enhance risk mitigation and help reduce volatility in a variety of market environments. Joshua Lofgren, CFA - Portfolio manager, Investment Grade Credit and Andrew Kronschnabel, CFA - Portfolio manager, Head of Investment Grade Credit at MetLife Investment Management, spoke with Pensions & Investments to discuss their views on long short credit and why they believe it can help provide protection for both institutional and retail investors.  Joshua and Andrew highlight what they believe are the four key tenets of a long short strategy:

  • A focus on deep credit research to develop the best total return ideas
  • A portfolio construction process that de-emphasizes duration risk and emphasizes idiosyncratic trade ideas
  • Historically muted correlation to broad market indices
  • Can help mitigate downside risk while participating in upside opportunities