Our subject matter experts discuss the use of credit risk measures in evaluating firms to determine tendencies in performance in comparison to their peers in the S&P 500 universe.

In early October, equity markets suffered their second major correction this year and their worst fall in more than eight months. Rising yields in particular increase the potential for equity volatility.

Our subject matter experts demonstrate that firms with high credit quality risk and high default risk tend to underperform their peers in the S&P 500 universe on average, especially seen in the tech sector over the last two years. Our experts also show how CreditEdge factor-based strategies have tended to succeed in particular during flattening yield curve environments, with the performance of the low credit quality risk strategy tending to be more insulated to interest rate risk on average.

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