This edition of Fathom the Strategy takes a closer look at the credit underweight in our current asset allocation. We update and confirm our previous finding that deteriorating leverage levels among the healthiest US firms should be considered as a growing source of systemic vulnerability for financial markets. As a result, we maintain a strong preference for high levels of liquidity and prefer accessing credit risk through a simple synthetic exposure to a mix of cash, equity and government bonds....

Breaking up credit: it’s not you, it’s me…