From the Wall Street Journal's "Bond Rout Hits Safest
Company Debt" by Sebastian Pellejero, Mar 22, 2021
Company Debt" by Sebastian Pellejero, Mar 22, 2021
With spreads still historically narrow, investors aren’t getting properly compensated for riskier corporate debt, said David Kotok, chief investment officer at Cumberland Advisors, which manages around $4 billion in assets. Despite the selloff, his firm has preferred investment-grade corporate bonds with shorter-dated maturities.
“The time to chase yield is when spreads are very wide,” he said. “When there is no prevalent fear of default, and spreads are very tight, that you only get a few basis points by sacrificing credit quality, history shows that is a bad trade.”
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David R. Kotok
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Wall Street Journal
