January 2021 / VIDEO
Three Reasons to Favor Floating Rate Loans in Today's Market
Key Insights
- Our asset allocation committee is overweight to floating rate loans because they offer certain potential advantages in today’s market.
- Loans’ shorter duration profile would likely offer some degree of insulation from higher interest rates, and while they are subject to higher credit risk, they could offer risk-adjusted access to high yield issuers.
- Leveraged loans also offer favorable relative value over other high yielding investments.
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Sébastien Page is head of Global Multi-Asset and chief investment officer. He is a member of the Asset Allocation Committee, which is responsible for tactical investment decisions across asset allocation portfolios. Sébastien also is a member of the Management Committee of T. Rowe Price Group, Inc.