Janus Henderson's Maroutsos Sees a Reckoning Coming in Corporate Credit

The video discusses the impact of excess debt on the corporate credit market, highlighting the challenges in the high yield market due to liquidity stress and the potential increase in fallen angels. Experts suggest a cautious approach to risk, focusing on global assets and short-duration investments to maintain a solid yield without altering risk profiles. The discussion emphasizes the importance of understanding market dynamics and the potential for good investments despite current volatility.

What is a significant challenge faced by the high yield market according to the first section?

• Excessive liquidity

• High interest rates

• A large base of dedicated investors

• A small base of dedicated investors

What are 'fallen angels' in the context of the corporate credit market?

• Companies that have improved their credit rating

• Bonds that have been upgraded to investment grade

• Companies that have been downgraded to junk status

• Newly issued high yield bonds

Why might investors get into trouble with high yield bonds?

• They have a low correlation to equities

• They offer guaranteed returns

• They are considered risk-free

• They are treated like equities but lack defensive qualities

What approach is suggested for managing risk in the current market environment?

• Ignoring global market trends

• Investing heavily in high yield bonds

• Focusing solely on domestic assets

• Taking a patient approach and observing market developments

What is the focus of the fund managed by the speaker in the third section?

• High-risk speculative investments

• Short duration global assets with a solid yield

• Long-term investments in high yield bonds

• Domestic equities with high returns