Exploring Opportunities in Alternative Fixed Income Investments

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The alternative fixed income asset class offers investors a diverse range of investment options, including private debt, consumer loans, mortgage investments, insured loans, SME loans, infrastructure debt, and asset-backed securities (ABS). These assets have the potential to provide higher yields than government and corporate bonds and relatively low correlations to traditional assets. Moreover, alternative fixed income allocations can offer exposure to a broad range of return drivers, including ESG-focused drivers.

Alternative fixed income investments are particularly attractive to long-term investors such as pension funds and life insurance companies. Many of these assets come with additional safety measures such as covenants and guarantees, which make them a safer option compared to traditional corporate loans.

Alternative fixed income strategies vary significantly in terms of spread, risk, capital charge, liquidity, duration matching, and ESG opportunities. As a result, investors can choose the assets that best fit their investment needs by taking into account these various characteristics.