We recently caught up with Sandy Liang, President, Purpose Investments Partners, and Portfolio Manager of Purpose Investments' Credit and Fixed Income Funds and ETFs about the conflicting interpretation of signals coming from the credit market about where we are in the cycle. You might be surprised to find out what Sandy Liang thinks.
"First of all the business cycle is the business cycle. A lot of investors are in the business of trying to forecast because when you're fully invested in equities, that's how you get really hurt, going into a recession. You can be down 20% before you know it," says Liang. "The great thing about what we do, is that we are credit investors. So we lend money, and we make a coupon off our investments every month. So when you're in the credit market, and you're a lender, the downturns are not nearly as severe."
"A typical downturn, even high-yield market, which is not investment grade rated ā so we're talking single-B on average ā a typical downturn in the asset class, is maybe low to mid single digit negative return, in the depths of a recession," says Liang. "In that context, as an active manager, we can tailor our strategy so we can go more interest-sensitive, and more defensive when we see a downturn coming."
Sandy Liang shares his thoughts on the credit market, and about where his team is positioned given the current market conditions.
Sandy has more than 25 years of experience managing credit investments. He spent 17 years on Wall Street, leading fixed income for Cobalt Capital Management, and as a Senior Managing Director at Bear, Stearns & Co., where he was voted to Institutional Investor Magazineās All-America Fixed Income Research Team for seven consecutive years.
