Why MFS thinks global credit belongs in portfolios now

InvestorDaily

US-based investment manager MFS has outlined five reasons for investors to consider global credit. The time may be right for broader use of global credit in fixed income portfolios, according to MFS senior managing director Benoit Anne, who said the asset class is ticking several boxes amid a complex market backdrop. With de-risking from equities looking “compelling” amid strong performance and potential valuation headwinds ahead, and rising yields in longer-dated government bonds unsettling investors, Anne argued global credit offers a middle ground for both objectives.

It comes as equities, particularly US equities, have rallied strongly in recent months on AI optimism, though a recent sell-off in tech and chip stocks has seen the Nasdaq plummet the most since April last year. And while sentiment remained positive in May, State Street’s latest Risk Appetite Index showed risk appetite eased in the month from April’s highs. Against this backdrop, Anne said global credit warrants consideration in fixed income portfolios for five key reasons.

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