Mark Heppenstall On The Incoming Rate Hike And Corporate Debt

• Benzinga recently interviewed Mark Heppenstall, Chief Investment Officer of Penn Mutual Asset Management.
• In a wide-raging conversation, the fixed income specialist went into several issues including the interest rate hike, corporate debt, fixed income instruments, foreign investments and bonds.
• This article will focus on how his firm will rebalance its portfolio with the incoming rate hike and on his views on corporate debt and attractive sectors.

In a very interesting interview, Heppenstall was asked about how he would rebalance Penn Mutual’s portfolio -especially fixed income securities- coming up to the end of the year, with the incoming interest rate hike.

“We tend to be, especially in the general count, more long-term focused,” he explained. The firm is certainly re-investing new money that is coming in, “whether it is the maturities or the redemptions or just new business that's generating cash flow,” he added.

So, he continued, there is not much turnover with regards to the bulk of the firm’s investment activity, really. “At this point, a lot of it is putting new money to work.”

The expert was then questioned about corporate debt: “Which sector, outside of financials, is the most attractive coming up in terms of risk and reward?”

Penn Mutual generally tries to stay very well diversified, he explicated, “especially when it comes to new issues markets. We're waiting for the opportunities,” he complemented.

For instance, on Wednesday, Visa Inc V was coming, and the firm was certainly participating in it.

He then went on to look into specific sectors. “In a certain way, in terms of potentials for performance, the energy space has given a lot of the dislocations that are occuring in the fixed income markets in that space, certainly, if you're able to successfully navigate through and pick the eventual winners that come out of that space, there's certainly room for opportunity there.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.