What is causing the current selloff in credit markets?

The credit market selloff is primarily induced by the Iran war, which began on February 28th, leading to significant volatility and widening credit spreads.

Are investors finding opportunities in the current credit market?

Yes, some investors are capitalizing on the selloff to buy oversold investment-grade bonds, believing strong fundamentals will offer resilience and potential gains.

Have credit markets fully priced in the war's long-term costs?

Some market participants believe credit markets have not yet fully priced in the long-term economic impact of the war, suggesting potential for further adjustments.

Home / Business and Economy / War's Shadow: Investors Seek Bargains in Volatile Credit Markets

War's Shadow: Investors Seek Bargains in Volatile Credit Markets

18 Mar

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Summary

Some investors are buying oversold investment-grade bonds for potential gains.
Others caution credit markets haven't priced in the war's full long-term cost.
Global credit spreads are at their widest since June 2025, indicating a selloff.

War's Shadow: Investors Seek Bargains in Volatile Credit Markets

The credit market has experienced a significant selloff following the onset of the Iran war on February 28th. This volatility has prompted some money managers to seek out investment-grade bonds that are now oversold, believing that strong underlying fundamentals will help them navigate the economic uncertainties and conflict.

Firms like Paragon Capital Management are selectively increasing exposure to European investment-grade financials, noting cheaper valuations compared to global peers. Similarly, Aberdeen Investments favors Asian notes in sectors such as utilities and telecommunications, citing stronger local revenue and earnings visibility. These investment choices are driven by the fact that global credit spreads have reached their widest point since June 2025.