Can senior secured loans protect portfolios from rate hikes?

The threat of rising interest rates to investors' portfolios - in particular their fixed income positions - is becoming more apparent, but can more niche areas like senior secured loans protect them from losses?

Stronger than expected data from the UK's resurgent economy continues to heap pressure on the Bank of England's Monetary Policy Committee (MPC), which must decide when to raise the base rate of interest. Investors too must be ready to shift their positions if rates start to climb, especially given the increase in the number of fixed income 'tourists' which some fund managers believe are a growing threat to stability. Jim Shanahan, a portfolio manager running J.P. Morgan's Senior Secured Loans investment trust, said the asset class offers protection against rising rates because they ar...