Investors, however, can take some illiquidity if other aspects of the investment have the right conditions, such as protections (coverage and quality tests) and protections against loss, Dahl said, adding that until now, defaults have been extremely low.
“On the quality front, double-Bs are about 50% of the high-yield market today, and historically they were probably in the mid- to low-40s,” he said. “So that’s a pretty big change.”
According to Poli, it’s never been more important to understand macro influences on the market than it is today “where so much is being driven by market participants’ changing views of the macro landscape even when there isn’t meaningful change in the data.”
“There’s attractive opportunities in all of these asset classes, and dislocations are occurring quickly,” she said. “Being able to nimbly reallocate your portfolio is very key.”