A borrowing boom among technology companies and governments is upending debt indexes, raising questions about their relevance to investors. “We’re actually starting to think about whether managing versus a benchmark makes a whole heap of sense,” Ross Pamphilon, Impax Asset Management’s fixed income chief investment officer, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “You’re going to end up owning a lot of US Treasuries if you’re in the aggregate index and a lot of tech if you’re in the US investment-grade index,” says Pamphilon, who estimates that about 12% of the high-grade market is now AI or AI related. They also discuss climate risk, opportunities in mortgage-backed debt plus the timing and severity of the next credit cycle.
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