PGIM's Tipp Says Investors Shouldn't Be 'Nervous' About Investment-Grade

The video discusses the current state of the credit market, focusing on the rebound in high yield and the lack of participation in investment grade. It explores factors such as the prevalence of triple B's, economic growth, corporate debt levels, and trade uncertainties. The discussion includes investment strategies, highlighting the importance of being in the right names and the impact of transaction costs. The video also covers the dynamics of credit spreads and duration, emphasizing the potential for tightening spreads if the economy improves.

What is one reason for the lack of participation in investment grade markets?

• Prevalence of triple B's

• High issuance of triple A bonds

• Low corporate debt levels

• Increasing economic growth

Why might some investors be hesitant to enter the investment grade market?

• Wide range of investment options

• Low transaction costs

• High transaction costs

• Abundance of new issues

What is a key factor driving the demand for new issues in the investment grade market?

• High demand for new issues

• High demand for derivatives

• Low demand for new issues

• Low demand for derivatives

How is investment grade typically broken down in terms of risk factors?

• Government bond and equity spread

• Corporate bond and equity spread

• Treasury bond and credit spread

• Equity and bond spreads

What might happen if the economy picks up significantly?

• Win on duration, lose on spreads

• Lose on both spreads and duration

• Break even on duration, win on spreads

• Win on spreads, lose on duration