Why We Believe Senior Loans Work in This Market Environment
As an asset class, senior loans historically have produced the type of yield that investors seek from fixed income products. Here at OppenheimerFunds, we encourage investors to take a long-term, strategic view of this asset class.
As a firm, our view of senior loans is fairly simple. We believe there are a ton of great companies in the U.S., and investors can lend to them at a senior and secure level. In the current market environment, senior loans are generating twice the interest that one can get from Treasuries.
In the next video in our series, we address common investor concerns about senior loans.
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Short-term interest rates and longer term treasury rates may or may not move in tandem directionally or in magnitude.
Senior loans are typically lower rated and may be illiquid investments (which may not have a ready market). Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes, regulatory and geopolitical risks. Fixed income investing entails credit and interest rate risks. When interest rates rise, bond prices generally fall, and a fund’s share prices can fall. Diversification does not guarantee profit or protect against loss.
These views represent the opinions of the Portfolio Managers at OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.