They were allowed to take only $360, so they left behind the wealth and property her parents had accumulated over their combined 50 years of work. That experience informs Aronov’s view of what’s at the heart of credit portfolio management: risk. Now a 21-year veteran of financial markets, Aronov leads market strategy for the $16 billion absolute return fixed-income platform at J.P. Morgan Asset Management in New York. Fascinated by the mathematical bounds of bond markets, she says fixed-income investors need to learn the value of cash in this latest crisis. She spoke to Bloomberg Markets about the opportunities and hazards she sees ahead.
JAMES CROMBIE: In the eye of the credit market storm, what do we know?
OKSANA ARONOV: There’s a fair amount of complacency around the breadth and the depth of the impact that an extended economic shutdown will have on businesses, particularly in the lower-rated part of high yield. These are smaller businesses likely to have the most difficult time. We can’t really manage something that we can’t yet measure. That’s the big difference between 2008 and today. We’ve never been in a situation like this, where the economy is effectively shut down.
In terms of the pandemic, we are still in the very early stages of the escalation phase. As testing ramps up and the number of cases continues to explode, and unfortunately we see more fatalities from the disease, it’s hard to imagine that there will be anything constructive priced into the market.
JC: You were already very worried at the start of this year when most others weren’t. Why?
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