Healthcare Organizations’ Top 3 Investment Concerns for Balance Sheet Assets

September 07, 2017 | Ben Mohr, CFA, Senior Research Analyst, Fixed Income

Historically, healthcare organizations have covered their cost of debt by investing in a conservative mix of fixed income securities. However, for most of the recovery since the Great Recession, the yield on their debt payments exceeded the Bloomberg Barclays Aggregate (Agg) bond index yield. Therefore, many organizations were forced to consider riskier assets to cover their debt payments as a result of this adverse spread. Now that the Federal Reserve rate hikes are underway, Agg yields are once again approaching parity with healthcare issuer debt yields and thereby reducing the pressure to invest in riskier assets to make up for the spread disparity.

Download PDF

Ben Mohr, CFA
Senior Research Analyst, Fixed Income

Get to Know Ben

Related Content

05.17.2018

What are Volatility Risk Premium Strategies?

Volatility Risk Premium (“VRP”) strategies — also known as defensive equity strategies — are relatively new to the institutional…

02.22.2018

Value Underperformance in the Current Market Cycle

With the value premium seemingly in decline, value investors have had a lot to complain about over the past ten…

01.30.2018

2018 Market Preview

Each year, investors face numerous questions that can impact their portfolios, and 2018 is no different. How will tax reform…

01.23.2018

How Will Tax Reform Impact Individual Investors?

We recently penned a letter outlining how the Tax Code changes may impact capital market expectations. Although the changes to…

12.20.2017

How Will Tax Reform Impact Asset Class Returns?

On December 20, 2017, Congress passed the final version of the Tax Cut and Jobs Act (H.R. 1).  This tax…

11.10.2017

When Popularity is an Achilles’ Heel: Bank Loan Re-Pricings

Through October, bank loans are up only 3.7% compared to high yield’s 7.5% return, and the disparity between the two…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >