- Fixed Income Portfolio Manager
United States, Institutional
Change
highlight_off
Thank you for your registration
You will shortly receive an email with your unique link to our preference center.
The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Anyone who invests in or follows the US credit markets has likely heard some version of the phrase "credit spreads are exceedingly tight" repeatedly in the past year.
What does this mean? When credit spreads are tight, it’s important to evaluate the level of compensation received for lending to a business versus the US government (as represented by US Treasuries), and how this pairs with one’s outlook for the economy and company fundamentals. Figure 1 illustrates the option-adjusted spread (OAS) of the Bloomberg US Corporate Bond Index, a proxy for US investment-grade fixed income, as a percentage of the yield-to-worst, or the lowest potential yield that an issuer can pay on a bond without defaulting, of the index. This demonstrates the relative compensation investors receive by choosing to allocate to this sector compared to US Treasuries — the higher the line is on the chart, the more compensation an investor receives for the additional risk.
Figure 1
Right now, the additional compensation for lending to investment-grade companies relative to the US government is at levels not seen since before the global financial crisis, in 2007.
For the past three years, we’ve believed US Treasury volatility would exceed the volatility of credit spreads in the US investment-grade corporate market — a dynamic that’s come to pass. However, a key difference between the environment three years ago and today is that in a period such as 2022, when the US Federal Reserve was raising interest rates in an effort to tame inflation, credit spreads were significantly wider to begin with, as concerns about a recession rose. At the time, the additional spread in corporate bonds compensated investors for volatility in US Treasuries because a rise in the Treasury base rate could be absorbed by credit spreads tightening. In today’s environment, unless we are about to enter a level of OAS as a percentage of yield not seen since before the year 2000, we believe there is little scope for credit-spread tightening broadly.
Against this backdrop, we suspect it may be difficult for fixed income managers who must seek to replicate and outperform a benchmark to navigate the market effectively, given the lack of additional premium for investing in corporate bonds. Flexibility to rotate between Treasuries and credit may be crucial to mitigate credit risk in the current environment. As such, we maintain our conviction that benchmark-agnostic fixed income managers who can adjust their allocations more freely may be better positioned to navigate the current market.
Expert
Related insights
Showing
of
Insights Posts
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Weekly Market Update
Continue readingBy
event
4
min
Video
2026-05-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Credit: the power of flexibility in an uncertain world
Continue reading
event
6
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Making the most of the new economic era’s bright spots
Continue reading
event
8
min
Article
2026-05-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Four investment perspectives on Trump’s first 100 days
Continue readingMultiple authors
event
5
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Flexibility with focus: how to position fixed income for volatility
Continue reading
event
7
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
A decade of impact: Verifying our impact investing funds
Continue reading
event
4
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Europe: a good hunting ground for high yield?
Continue reading
event
7
min
Article
2026-05-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
URL References
Related Insights
Stay up to date with the latest market insights and our point of view.
highlight_off
Thank you for your registration
You will shortly receive an email with your unique link to our preference center
Read next
Showing
of
Insights Posts
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Weekly Market Update
What do you need to know about the markets this week? Tune in to Paul Skinner's weekly market update for the lowdown on where the markets are and what investors should keep their eye on this week.
By
event
4
min
Video
2026-05-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Credit: the power of flexibility in an uncertain world
Uncertainty in credit markets can create opportunities for investors, provided allocations are flexible enough to benefit. But how can investors balance flexibility with discipline?
event
6
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Making the most of the new economic era’s bright spots
Despite uncertainty, there are important factors supporting a more optimistic approach. By focusing on structural trends and considering a wide range of views, investors can position portfolios for positive long-term returns.
event
8
min
Article
2026-05-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
USA
Macro and market
Tactical allocation
Wealth Program
Multi-asset
Asset allocation
Article
Fixed income
Equity
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Four investment perspectives on Trump’s first 100 days
Four of our experts across fixed income and equity share their asset-class level insights on the first 100 days of the current Trump administration and analyze the implications for investors.
Multiple authors
event
5
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Active management
Fixed income
Macro and market
Advised Retail Program
Credit
Government bonds
Investment grade
Article
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Flexibility with focus: how to position fixed income for volatility
Portfolio Manager Martin Harvey and Investment Director Marco Giordano explore how a focused use of flexibility can help position fixed income portfolios for volatility.
event
7
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
A decade of impact: Verifying our impact investing funds
Our impact investing strategies have been verified by BlueMark, the leading provider of independent impact verification and intelligence for the sustainable and impact investing market.
event
4
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Europe: a good hunting ground for high yield?
With attractive yields and a low duration profile, high yield can present potentially compelling opportunities for investors, despite the continued volatility.
event
7
min
Article
2026-05-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Finding fixed income opportunity in unprecedented times
Brian Garvey and Brij Khurana highlight the importance of diversified fixed income portfolios in managing volatility and seizing opportunities amid economic uncertainty.
event
4
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Allocating to fixed income in an age of austerity
Amar Reganti and Adam Norman explore how flexible fixed income strategies may offer stability and yield in a volatile market environment.
event
5
min
Article
2026-04-30
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
The impact of LMEs on high-yield, leveraged-loan, and CLO markets
Emily Shanks, Jeff Heuer, and Alyssa Irving explore the impact of liability management exercises on high-yield, leveraged-loan, and CLO markets.
Multiple authors
event
7
min
Article
2026-04-01
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
The yield buyer
Our fixed income experts examine the impact of tight credit spreads and elevated yields on today’s credit markets and explore the value of active management.
event
4
min
Article
2026-03-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
URL References
Related Insights
contact us
legal Information
© Copyright 2025 Wellington Management Company LLP. All rights reserved. WELLINGTON MANAGEMENT ® is a registered service mark of Wellington Group Holdings LLP. For institutional or professional investors only.
Enjoying this content?
Get similar insights delivered straight to your inbox. Simply choose what you’re interested in and we’ll bring you our best research and market perspectives.
highlight_off
Thank you for joining our email preference center.
You’ll soon receive an email with a link to access and update your preferences.