Bonds
DoubleLine Trims Riskiest High-Grade Bonds on Rates Concerns
- Credit chief Robert Cohen is boosting cash and selling BBBs
- Says tight spreads means ‘there’s not a lot of room for error’
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DoubleLine Capital is cutting its holdings of the riskiest tier of investment-grade bonds as a defensive move as it braces for bond yields to gyrate, and for high borrowing costs to potentially weigh on corporate earnings.
The $95 billion asset manager is broadly positive about high-grade debt but is selling BBB rated bonds and staying away from small regional lenders hit by the troubled commercial real estate sector and is underweight duration for long-dated bonds, said Robert Cohen, head of global developed credit at DoubleLine. He’s instead boosting his cash position to tactically take advantage of volatility over the next several months.