PPM America - Tue, 04/29/2025 - 10:54

PPM Quarterly: Seeking (Bond) Shelter in a Tariff-ied World

Regardless of what happens in the days and weeks to come concerning tariffs, US and global growth is likely to slow down materially in our view. However, bonds are once again demonstrating some of their defensive characteristics in times of market upheaval. With yields at elevated levels, the higher income potential of US fixed income becomes even more compelling for investors when considering that bonds have typically been less volatile than stocks over the last 20 years.

Here is what else you will find in today’s newsletter:

Infographic: It may be too early to see the bearish indicators caused by rapidly changing tariff news in hard economic data, given that most are reported with a lag. However, some less-followed economic data are pointing to increasing headwinds.
Investment Grade: Even amid the current market upheaval, we expect demand to remain in the IG market in the medium term. Additionally, spread widening has improved valuations in our view, and we lean on our experienced credit research team to identify undervalued securities in order to reposition portfolios tactically.
High Yield: The high yield market entered this chaotic period from a supportive fundamental starting point, considering positive rating trends, a low distress ratio and a below average default rate. We view elevated price volatility as an opportunity to move into favored sectors and credits at more attractive valuations.

Unless otherwise stated, the information presented has been prepared from market observations and other sources believed in good faith to be reliable. Information and opinions expressed by PPM are current as of the date indicated and are subject to change without notice. Forward-looking statements are subject to uncertainties that could cause actual developments and results to differ materially from the expectations expressed.

Past performance is no guarantee of future results. Investments involve varying degrees of risk and may lose value.

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Contacts

PPM America

Established in Chicago in 1990, PPM America, Inc. (PPM) is a US-based institutional asset manager with $80.22 billion in assets under management as of March 31, 2025. (1).

Originally founded as a captive asset manager for a global insurance company, we now oversee more than $56 billion on behalf of insurers globally. PPM exists to consistently support our clients in achieving their long-term value goals and has the experience and the expertise to support insurer’s unique and evolving needs across a range of investment solutions including public and private fixed income, real estate and private equity.

(1) AUM includes committed but unfunded capital for PPM’s private equity and commercial real estate businesses. AUM includes both securities issued by PPM CLO vehicles held by PPM separately managed account clients and the underlying collateral assets of the CLO vehicles managed by PPM.

Bob Meikleham
Managing Director, Global Client Group, Insurance
bob.meikleham@ppmamerica.com
312-843-5929

https://www.ppmamerica.com/

PPM America, Inc
225 West Wacker Drive, Suite 1200
Chicago, IL 60606

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