Why a Barbell Income Strategy May Help Late in the Cycle

Earning income without taking excessive risk is a balancing act—and it can be hard to pull off in the late stages of a credit cycle. A credit barbell strategy can help investors stay on their feet.

A credit barbell combines high-yield corporate bonds and other credit assets with high-quality government debt. Because the returns of these two asset types are usually negatively correlated, pairing them can be a good way to generate income while limiting downside risk.