Goldman Sach's Credit Investing Co-Chief Weighs In On Stimulus And Investment

Gene Naumovsky

As the Federal Reserve plans to purchase $200 billion in corporate bonds, high yield investment opportunities arise.

Returning interest rates to 0 and implementing limitless quantitative easing, the Federal Reserve plans on two new facilities purchasing $200 billion of corporate bonds, according to Business Insider.

Ashish Shah, co-chief investment officer for fixed income of Goldman Sachs Asset Management, believes investors should fund companies that will find gains from Federal stimulus. Shah recommended looking to investment-grade bonds that mature in five years or less.

"I think it's going to richen over the next couple of months as the Fed starts buying that part of the curve," Shah told Business Insider. Shah is not alone in his beliefs as in the last two weeks companies have raised a record of $220 billion in bond sales, Refinitiv data reported. Rating agencies are expecting a trend of downgrades, and Bank of America reported Fitch, Moody’s, and S&P downgrading investment-grade companies at a record rate since March.

Shah also told The Insider, “Over time, fallen angels end up being the best performing part of the high-yield market.” Business Insider reported Shah’s major recommendation of “selective buying in the high-yield space — specifically BB-rated companies — in addition to buying quality companies the Fed will be going after.”

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Economics, Finance and Investing