Fitch: Search for Yield Leads to More Risks in Credit Funds

April 28, 2015 8:00 AM

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(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Credit Funds Dashboard April 2015 here PARIS/LONDON, April 28 (Fitch) Fitch Ratings warns of the temptation that fixed income fund managers may have in current market conditions to overreach for yield, potentially loosening credit selectivity and leading to excessive credit and liquidity risk-taking.

Fund managers may be tempted to look for opportunities in lower-rated, less liquid, off-benchmark or longer-maturity bonds. This can lead to excessive risk-taking - there is a growing consensus among asset managers that the risks are beginning to outweigh the rewards, due to an overall increase in l...

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