State Street, Voya Seek Shelter From Default Risk

Major asset managers including State Street and Voya are shifting allocations away from corporate bonds into mortgage-backed and other securitized debt as rising energy prices and inflation fears make corporate credit look riskier. This risk-off reallocation could tighten spreads and increase demand in securitized markets while putting pressure on corporate bond spreads.

Analysis

Major asset managers including State Street and Voya are shifting allocations away from corporate bonds into mortgage-backed and other securitized debt as rising energy prices and inflation fears make corporate credit look riskier. This risk-off reallocation could tighten spreads and increase demand in securitized markets while putting pressure on corporate bond spreads.