In December of 2022, the global investment company KKR published a study on the benefits of investing in private credit in the current macroeconomic regime. Private credit can provide several benefits to investors who wish to diversify their portfolios while generating risk-adjusted returns.
Read moreDiversifying Through Private Loans Instead of Bonds
A question among most investors today is, “How can I better diversify my portfolio for yield while focusing on capital preservation?” Most money managers will suggest bonds; traditionally, bonds have been a great source for yield because they have a lower risk of default. However, bonds are not as attractive to investors today as they once were since yields are extremely low in the U.S. According to Aberdeen Standard, a traditional balanced investment portfolio of equities and fixed income would be forecasted to deliver a return of around 3% versus an average of 7% over the last 20 years. The simple answer of the question above of how to diversify a portfolio is to get innovative.
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