BlackRock Global Long/Short Credit Absolute Return Credit
Today's Landscape Reflects a Change in Regime
The combination of rising interest rates, tighter spreads and increasing volatility creates
challenges
Fixed income investors have traditionally relied on falling interest rates for performance, and swelling AUM has created
risks as rates rise
ā
Easy monetary policy suppressed volatility which is returning to markets, and complacency means investors are
unprepared for a potential regime change
10 Year Treasury Yield %
3
2.5
2
1.5
1
Jan-16
Mar-16
Interest rates are on the rise
Your
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
What
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
High Yield Spreads (bps)
850
750
650
550
450
350
250
Credit spreads are at post-crisis tights
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC.
Historical average
= 503bps
Jan-17
Jan-18
Source: Bloomberg. Barclays Live. All information as of 3/31/18. Index performance is for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Past
performance is no guarantee of future results.
BLACKROCK*
USR0418U-470515-1498457
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