Alternatives
Fixed income
Equities
Other links
Other links
  • See all results
  • See results in Products
  • See results in Insights

You are currently viewing the United States website Institutional website. You can change your location here or visit other RBC GAM websites.
Welcome to the RBC Global Asset Management site for Institutional Investors

In order to proceed to the site, please accept our Terms & Conditions.

This RBC Global Asset Management (U.S.) Website is intended for institutional investors only.

For purposes of this Website, the term "Institutional" includes but is not limited to sophisticated non-retail investors such as investment companies, banks, insurance companies, investment advisers, plan sponsors, endowments, government entities, high net worth individuals and those acting on behalf of institutional investors. The Website contains information, material and content about RBC Global Asset Management (collectively, the “Information”).

The Website and the Information are provided for information purposes only and do not constitute an offer, solicitation or invitation to buy or sell a security, any other product or service, or to participate in any particular trading strategy. The Website and the Information are not directed at or intended for use by any person resident or located in any jurisdiction where (1) the distribution of such information or functionality is contrary to the laws of such jurisdiction or (2) such distribution is prohibited without obtaining the necessary licenses and such authorizations have not been obtained. Investment strategies may not be eligible for sale or available to residents of certain countries or certain categories of investors.

The Information is provided without regard to the specific investment objectives, financial situation or particular needs of any specific recipient and does not constitute investment, tax, accounting or legal advice. Recipients are strongly advised to make an independent review with an investment professional and reach their own conclusions regarding the investment merits and risks, legal, credit, tax and accounting aspects of any transactions.

Accept Decline
3 minutes, 4 seconds to watch by  BlueBay Fixed Income team, M.Maggio Apr 1, 2025

Matthew Maggio, Senior Portfolio Manager on the BlueBay U.S. Fixed Income team, discusses how the President’s full tariff policy will soon be revealed and how that might affect the economy, consumers and markets. 

Watch time: 3 minutes, 4 seconds

View transcript

Hello and welcome to The Weekly Fix. My name is Matt Maggio and I’m a Senior Portfolio Manager with RBC GAM’s US Collateral Loan Obligation (CLO) business.

Tariff speculation has been the hot topic over the past few weeks, and has been the main driver of market volatility. Tomorrow, on Liberation day, President Trump will outline his tariff plan. 

Per Treasury Secretary Scott Bessent, the tariffs will be reciprocal in nature, and will provide the ability for impacted countries to lower their tariffs, reduce non-tariff barriers, and end currency manipulation, all in an effort to make the global trading system fair for American workers again.

Additional drivers of uncertainty include potential near term inflation due to tariffs, reduced or paused capex spending, and a potential higher for longer rate environment. Consumers are also taking a pause given the market noise, as confidence surveys have started to show weakness.   

Two sectors that have seen the most volatility from tariff fears are autos and building products. During Covid, we saw several sponsors taking up leverage well above historical norms in building products. That trade is now seeing the pain of what cyclicality does to liquidity. All that to say, we think this is a great opportunity to pick winners in the sector to drive returns over the next 12-18 months.    

The US Leveraged loan market has held up relatively well in this environment given a consistent CLO bid in the face of the ETF (Exchange Traded Fund) outflows. The current environment for new CLO creation has been difficult given widening AAA spreads and a steepening curve. Equity arbitrage has been challenged recently as the loan market has lagged the broader markets, which is not a typical historically speaking.   

Price volatility has been seen most in tight B3 / B- loans, which saw recent tight new issue execution of SOFR (Secured Overnight Financing Rate) + 275 – 300, and has created convexity and opportunity to buy at a discount. These spreads from 4Q24 were recent historical tights.  B- loans since January are 50bps wider, while higher quality BB- loans are only 25bps wider. Trading up in quality given market uncertainty is a popular trade. 

Strategically we had built cash going into the volatility, especially focused on selling low coupon B3/B-. Right now, we feel staying nimble is the best strategy.    

Thank you for your time and partnership.

Key points

  • Tariff speculation has been the main driver of market volatility. 

  • Additional drivers of uncertainty include:

    • Potential near-term inflation due to tariffs

    • Reduced or paused capex spending

    • A potential higher for longer rate environment

  • The US Leveraged loan market has held up relatively well in this environment.

Disclosure

This material is provided by RBC Global Asset Management (RBC GAM) for informational purposes only and may not be reproduced, distributed or published without the written consent of RBC GAM or its affiliated entities listed herein. This material does not constitute an offer or a solicitation to buy or to sell any security, product or service in any jurisdiction; nor is it intended to provide investment, financial, legal, accounting, tax, or other advice and such information should not be relied or acted upon for providing such advice. This material is not available for distribution to investors in jurisdictions where such distribution would be prohibited.

RBC GAM is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management Inc. (RBC GAM Inc.), RBC Global Asset Management (U.S.) Inc. (RBC GAM-US), RBC Global Asset Management (UK) Limited (RBC GAM-UK), RBC Global Asset Management (Asia) Limited (RBC GAM-Asia) and RBC Indigo Asset Management Inc. (RBC Indigo), which are separate, but affiliated subsidiaries of RBC.

In Canada, this material is provided by RBC GAM Inc. (including PH&N Institutional) and/or RBC Indigo, each of which is regulated by each provincial and territorial securities commission with which it is registered. In the United States, this material is provided by RBC GAM-US, a federally registered investment adviser. In Europe this material is provided by RBC GAM-UK, which is authorised and regulated by the UK Financial Conduct Authority. In Asia, this material is provided by RBC GAM-Asia, which is registered with the Securities and Futures Commission (SFC) in Hong Kong.

Additional information about RBC GAM may be found at www.rbcgam.com.

This material has not been reviewed by, and is not registered with any securities or other regulatory authority, and may, where appropriate and permissible, be distributed by the above-listed entities in their respective jurisdictions.

Any investment and economic outlook information contained in this material has been compiled by RBC GAM from various sources. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions in such information.

Opinions contained herein reflect the judgment and thought leadership of RBC GAM and are subject to change at any time. Such opinions are for informational purposes only and are not intended to be investment or financial advice and should not be relied or acted upon for providing such advice. RBC GAM does not undertake any obligation or responsibility to update such opinions.

RBC GAM reserves the right at any time and without notice to change, amend or cease publication of this information.

Past performance is not indicative of future results. With all investments there is a risk of loss of all or a portion of the amount invested. Where return estimates are shown, these are provided for illustrative purposes only and should not be construed as a prediction of returns; actual returns may be higher or lower than those shown and may vary substantially, especially over shorter time periods. It is not possible to invest directly in an index.

Some of the statements contained in this material may be considered forward-looking statements which provide current expectations or forecasts of future results or events. Forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Do not place undue reliance on these statements because actual results or events may differ materially from those described in such forward-looking statements as a result of various factors. Before making any investment decisions, we encourage you to consider all relevant factors carefully.

® / TM Trademark(s) of Royal Bank of Canada. Used under licence.

© RBC Global Asset Management Inc., 2025
document.addEventListener("DOMContentLoaded", function() { let wrapper = document.querySelector('div[data-location="inst-insight-article-additional-resources"]'); if (wrapper) { let liElements = wrapper.querySelectorAll('.link-card-item'); liElements.forEach(function(liElement) { liElement.classList.remove('col-xl-3'); liElement.classList.add('col-xl-4'); }); } })