Senior Loans And CLOs Rise To The Occasion

The report highlights the attractiveness of senior loans and CLOs as a defensive strategy against persistent inflation and the unlikely prospect of near-term Fed rate cuts. These instruments offer floating-rate protection and lower duration exposure compared to traditional fixed income.

Key Takeaways

• 1.Expectations for Fed rate cuts have been pushed into 2027, with markets favoring a rate hike probability of roughly 70%.
• 2.Senior loans and CLOs are recommended for portfolio diversification due to their floating rate coupons and lower duration exposure in a high-inflation environment.

Table of Contents

• Bottom line up top
• Portfolio considerations
• About Nuveen’s Global Investment Committee
• Endnotes

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