DoubleLine.com Posts New Paper on State of the Investment Grade Corporate Bond Sector

Rhea-AI Summary

DoubleLine Capital has released a new paper titled "Investment Grade Corporates: History Lessons for Ahistorical Times" by Monica Erickson, head of the investment grade corporate bond team. The paper discusses the historical context of investment grade corporate bonds following the Federal Reserve's intervention in March 2020, aimed at stabilizing the market due to the COVID-19 pandemic. It highlights the current low yields, interest rate sensitivity, and the potential risks posed by rising interest rates as the global economy recovers.

Positive

• DoubleLine manages $137 billion in assets as of September 30, 2021, indicating strong market positioning.
• Corporate profitability and earnings growth are projected to remain strong amidst economic recovery.

Negative

• Investment grade bonds exhibit high sensitivity to rising interest rates, which poses a significant risk to investors.

LOS ANGELES, Nov. 12, 2021 /PRNewswire/ -- DoubleLine.com has published a new paper, titled "Investment Grade Corporates: History Lessons for Ahistorical Times," by Monica Erickson, head of the investment grade corporate bond team at DoubleLine Capital.

In March 2020, amid the market dislocations caused by societal and business shutdowns in response to the COVID-19 epidemic, the Federal Reserve, Ms. Erickson writes, "engineered an unprecedented intervention" to support access to credit by U.S. corporations. In the wake of that intervention, she observes, "investors in high grade corporate bonds face historically low yields, tight spreads and a high degree of interest rate sensitivity. However, as the global economy continues to reopen, and corporate profitability and earnings growth remain strong, the spread should remain range-bound. In my view, the main risk to investment grade bonds remains in the sector's elevated sensitivity to higher interest rates."

In the paper, with an eye to helping investors manage their exposure to the investment grade corporate bond sector, Ms. Erickson reviews its evolution and historical norms relative to the present, including the growth and size of this market, its credit fundamentals and its interest-rate sensitivity (duration).

To read the paper, please go to this landing page: https://doubleline.com/wp-content/uploads/Investment-Grade-Corporates-History-Lessons-for-Ahistorical-Times.pdf

About DoubleLine

DoubleLine provides its services through investment advisers registered under the Investment Advisers Act of 1940. As of the September 30 close of the third quarter of 2021, DoubleLine managed $137 billion in assets across all vehicles, including open-end mutual funds, collective investment trusts, closed-end funds, exchange-traded funds, hedge funds, variable annuities, UCITS and separate accounts. DoubleLine's offices can be reached by telephone at (213) 633-8200 or by e-mail at info@doubleline.com. News media can reach DoubleLine by e-mail at media@doubleline.com. DoubleLine® is a registered trademark of DoubleLine Capital LP.

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SOURCE DoubleLine

FAQ

What is the focus of DoubleLine's new paper on investment grade corporates?

The paper focuses on the historical context and current state of the investment grade corporate bond sector, particularly in light of the Federal Reserve's market interventions.

Who authored the paper released by DoubleLine on investment grade corporates?

The paper was authored by Monica Erickson, head of the investment grade corporate bond team at DoubleLine.

How much does DoubleLine Capital manage as of September 30, 2021?

As of September 30, 2021, DoubleLine Capital managed $137 billion in assets.

What risks are associated with investment grade bonds according to DoubleLine's new paper?

The primary risk associated with investment grade bonds is their elevated sensitivity to higher interest rates.

What insights does DoubleLine offer regarding corporate profitability?

DoubleLine suggests that corporate profitability and earnings growth are expected to remain strong as the global economy continues to reopen.