Asia Fixed Income: Are We at the End of the Credit Cycle
Teresa Kong, CFA, Portfolio Manager
If we define a credit cycle as the expansion and contraction of access to credit, marked by the peaks in credits spreads (or lowest bond prices), credit cycles have typically lasted, on average about 8 years—the previous peak in credit spreads occurred in November of 2008. If this is a typical credit cycle, we might be close to the end of the cycle with spreads reaching their peak and prices reaching their nadir. What does it mean for Asia fixed income and how can investors position their portfolios?