Complement Your Core with Senior Loans
Fixed Income investors are currently faced with the dual challenges of persistently low yields tied to historically low global interest rates and potential volatility resulting from interest rate and economic uncertainty. They may assume their options are limited in the hunt for high yield and low risk.

Senior loans may offer investors a potential solution to pursue both. Over the last five years, senior loans have produced the highest risk-adjusted yields, compared with U.S. Treasuries, investment-grade debt, and high-yield bonds.1

3 key benefits of senior loans include:

  • Strong relative yields with low interest-rate risk,
  • Senior and secured status in a company’s capital structure along with historically lower relative volatility than high-yield bonds,2 and
  • Portfolio diversification to traditional asset classes.

In light of the recent rate increase by the U.S. Federal Reserve’s (Fed), we believe the time may be right for investors to consider an allocation to senior loans. In most rising rate environments, senior loans have historically outperformed traditional fixed income asset classes.

For a deeper dive into the potential benefits of allocating to senior loans, read our paper.

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1Source: Bloomberg, 3/31/18. Past performance does not guarantee future results.

2Sources: JPMorgan Research and Bloomberg, as of 3/31/18.