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Don't Stampede Into U.S. Credit, Guggenheim's Scott Minerd Warns 

May 3, 2017

Sally Bakewell, Bloomberg

Guggenhiem Partner's chief investment officer has a message to clients: Don’t get too swept up in the frenzied reach for yield.

The hunt for return on capital is driving institutional investors -- in particular from Asia -- to the U.S. where yields are higher than what they can pick up at home, Scott Minerd said Monday at a conference in Beverly Hills, California. Debt buyers are facing a balancing act of trying to meet legacy liabilities, while stuffing portfolios with high-quality corporate bonds and loans, according to Minerd who oversees about $270 billion at the fund manager.

“One of the things we’ve been doing is trying to lean against it a little bit with our clients,” he said of the hot credit markets, which have been buoyed in part by low global interest rates. “To get them to understand that we’re late in economic expansion, credit spreads are extremely tight, especially in high-grade corporate debt and high yield.”

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