Systemic risks versus idiosyncratic events
Update: 2025-10-28
Description
Systemic risk, or just unusual events? Recent market turbulence leaves some questions about how long high valuations and tight spreads will continue.
Anne Greenwood, Institutional Portfolio Manager on RBC BlueBay’s US Fixed Income team, discusses the current market landscape and opportunities for active managers.
- Equities at record highs and tight credit spreads indicate market resilience, despite recent jitters.
- Lower-quality high-yield bonds and leverage loans require caution due to deteriorating credit metrics and increased default rates.
- Active managers may be able to capitalize on volatility by providing liquidity and generating strong risk-adjusted returns in fundamentally stable companies.
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