One of the most prevalent themes we have seen coming from investment consultants recently has been credit-based strategies. This can be explicitly under the umbrella of Cashflow Driven Investment (“CDI”), or simply portfolios dominated by multi-asset credit, private credit, investment grade, buy & maintain, or securitised credit.
In our view, these proposals typically rely too heavily on the credit asset class, and it would be more efficient to instead utilise credit as part of a broader diversified multi-asset approach. The arguments we see being made to support credit-based solutions can be grouped into the five common assertions below, on which we provide our perspective.