Why Today's Heightened Dispersion Suits A Systematic Approach

AllianceBernstein (AB)4.98K FollowersFollow5ShareSavePlay(7min)SummaryToday’s credit markets look deceptively dull: while average spreads are tight, dispersion across issuers is unusually wide.Currently, we see the range of likely economic outcomes narrowing globally and credit spreads remaining tight.At the beta level, average credit spreads are important for determining how well bond market risks are being compensated.Tight average spreads suggest that credit beta may be relatively hard to come by these days.Given today’s narrow credit spreads, we believe we may be entering a more fruitful period for active credit selection. MicroStockHub/iStock via Getty Images By Bernd Wuebben When bond markets exhibit wide credit-spread dispersion, look to a systematic approach to generate alpha. Today’s credit markets look deceptively dull: while average spreads are tight, dispersion across issuers is unusually wide. That combination reshapesThis article was written byAllianceBernstein (AB)4.98K FollowersFollowAB is a research-driven investment firm that combines investment insight and innovative thinking to deliver results for our clients. At AB we believe that research excellence is the key to better outcomes and as a result we have built a global firm with exceptional research capabilities. We offer a broad array of investment services that span geographies and asset classes to meet the needs of private clients, mutual fund investors and institutional clients around the world.