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Portfolio perspectives | Podcast - 12:18 MIN

Talking Heads – Household loans, an alternative asset class that improves the mix

2 Authors - Portfolio perspectives
05/06/2023 · 2 Min
This material is intended for Institutional Investors (as defined in the Securities and Futures Act, Chapter 289 of Singapore) only and is not suitable or intended for persons who do not qualify as such.

As growth in developed economies slows and restrictive monetary policy rates start to bite, investors looking to alternative markets for portfolio diversification and attractive returns could well consider a relatively young, little-known, but high-quality asset class: household loans.  

Loans to relatively high-income households in the US, Europe and potentially in Asia tend to exhibit low mark-to-market volatility and low defaults and come with a comparatively high coupon that helps absorb losses. Other characteristics of the loans, typically made to creditworthy earners to consolidate debt into a single, cheaper loan, include a 3-5 year maturity and full amortisation.

Tonko Gast, founder and CEO of Dynamic Credit Group and Portfolio Manager, discusses the asset class with Co-Head of the Investment Insights Centre Andrew Craig on this Talking Heads podcast.

You can also listen and subscribe to Talking Heads on YouTube.


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