Tackle Interest Rate Uncertainty With Structured Credit
Should advisors and investors be taking a closer look at the opportunity set within structured credit right now? After all, the current fixed income environment may well work in favor of the structured credit market.
Key Takeaways:
- Structured credit may be getting overlooked by investors, but it offers a compelling opportunity set amid today’s macroeconomic environment.
- Many structured credit securities, such as CLOs, are floating-rate instruments, and thus perform well while interest rate uncertainty persists.
- Guggenheim Investments offers the Guggenheim Securitized Income ETF (GISC), which provides an actively managed take on structured credit exposure.
Consider what’s going on with inflation, interest rates, and the Federal Reserve. Persistent inflation has led some Fed Committee members to push for a rate hike, but the July CPI report increased market optimism that inflation could moderate in the coming months. Should this play out, the Fed may refrain from adjusting interest rates until next year.
The near-term uncertainty over the Fed’s rate policy strengthens the use case for structured credit investments. In part, this is because some structured credit securities — like collateralized loan obligations (CLOs — are floating-rate securities. As such, these investments tend to have much lower interest rate sensitivity than more traditional areas of the bond market.
See More: The Structured Credit Advantage: High Yields, Low Defaults
Tackle the Structured Credit Opportunity With GISC
Keeping this in mind, opting for amplified structured credit exposure could help a variety of different fixed income portfolios. For those looking to build up their access to the structured credit market, the Guggenheim Securitized Income ETF (GISC) may offer an effective solution.
GISC taps into Guggenheim’s immense fixed income experience to invest in a broad array of areas across the structured credit market. This includes CLOs, asset-backed securities (ABS), among others.
Crucially, GISC’s approach is bolstered through the inherent advantages of active management. This framework gives Guggenheim plenty of maneuverability for adjusting the fund’s allocations to best take advantage of the current fixed income environment. Considering that structured credit broadly performs well amid changing rate environments, this active approach can help the fund perform ahead of other fixed income ETFs if interest rates are adjusted.
GISC’s early track record is already showcasing the fund’s potential for providing compelling yield while inflation and interest rates remain in flux. As of July 31, 2026, the fund has a 30-day SEC yield of 5.18%.
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