Holly McKechnie, Investors Chronicle, May 9, 2025:
Debt investors face two major challenges: interest rate risk and credit risk. Given the current political and economic landscape, it would be understandable to be nervous about both. However, for savvy investors there are still opportunities in this esoteric sector..
Many debt trusts focus on private credit – lending directly to (usually unlisted) businesses. In this category, Biopharma Credit (BPCR) is a popular choice among analysts, with Matthew Read, senior research analyst at QuotedData, describing the trust as “a well-oiled machine”..
Loans and bonds
An alternative way to access the debt space is M&G Credit Income (MGCI)..
Further along the risk spectrum is Invesco Bond Income Plus (BIPS), which has a 7.2 per cent yield and is trading at a premium of 1.7 per cent..
If you are willing to take on more risk still, the CQS New City High Yield Fund (NCYF) could be a good option. The trust invests in high-yielding fixed-interest securities. As these holdings tend not to be investment-grade, they are higher risk, but you do receive a yield premium. Read says: “The team is very good at buying unrated assets where the issue size is a bit too small to warrant getting a rating. They are very good at breaking that down and working out what the rating should be themselves.”..
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