The credit investment market has a wide range of securities. These range from highly rated investment grade issues to speculative high-yield issues. They also include bonds from emerging markets, which vary greatly in risk of default. The investor chooses where in the capital structure they want to invest their money. There are several options available for credit investing, including bank loans, structured products, and mutual funds.
A good way to get started in this market is to find a partner with proven experience in credit investing. The right partner will be able to evaluate and structure corporate credit offerings throughout the economic cycle. They will also look for opportunities that are reasonably valued but discounted. In addition, they will apply proven strategies to help you develop a risk-return profile.
Structured credit is a complex asset class that requires thorough research to make sure you are getting the best deal possible. The key to structuring credit investments is understanding the underlying collateral. This asset class is useful in a variety of market environments and can provide investors with an attractive risk-adjusted performance.
Structured credit products are an excellent way to diversify your portfolio while tailoring your credit risk exposure. These structured products are backed by the contractual obligations of borrowers to pay back investors. Mortgage agreements may become part of a securitization pool that provides investors with a steady source of payment. Traditional fixed income payment features are replaced with a payoff based on the performance of the underlying asset.
