The Challenge to Find Value in the Search for Yield

The video discusses the challenges in finding value in credit markets due to tightening credit spreads and the influence of economic and credit cycles. It highlights the importance of being selective in investments, focusing on higher quality assets, and the benefits of bank loans with floating rates. The discussion also covers the impact of Libor on investment strategies and explores opportunities in collateralized debt and securitized assets, particularly those backed by student loans.

What has been the biggest source of the rally in credit markets?

• Technology sectors

• Commodity-related sectors

• Healthcare sectors

• Financial sectors

What is a significant concern for investors in the current credit market environment?

• High inflation rates

• Declining stock prices

• Record levels of company leverage

• Decreasing interest rates

Why might investors prefer bank loans in a rising rate environment?

• They offer fixed rates

• They are government-backed

• They are less risky

• They have floating rates

What type of assets are considered to have a good risk premium according to the transcript?

• Government bonds

• Real estate investments

• Collateralized loan obligations

• Corporate bonds

What is the benefit of investing in securities backed by student loans?

• They are tax-free

• They offer an attractive spread

• They are not affected by economic downturns

• They have a high default rate