Volume 3: Zachary Griffiths, CFA
CreditSights in Conversation
Meet Zachary Griffiths, CFA
Head of IG and Macro Strategy at CreditSights
“A relentless pursuit of knowledge makes for the best analysts and strategists.”
Q&A
Q: What unconventional indicators do you find most valuable when assessing macroeconomic conditions and their impact on investment grade markets?
A: With the recent tariff volatility we have begun tracking American Association of Railroad (AAR) weekly data, daily TSA throughput data and Port of LA volume data. Our goal at this stage is to better understand how much tariff uncertainty is affecting global commerce and how it could waylay what had been a surprisingly resilient US economy.
Q: How do you approach the challenge of aligning long-term strategic goals with the short-term volatility often seen in macroeconomic environments?
A: Collaboration with our analyst team is key to cut through the noise and find the signal. Volatility oftentimes creates long-term strategic opportunities and that is our core principal when considering short-term volatility and how it impacts our longer-term view. In the words of Warren Buffet, it is wise for investors “to be fearful when others are greedy and to be greedy only when others are fearful.”
Q: Can you recall a time when a surprising macroeconomic shift required a rapid strategic pivot, and how did your team handle it?
A: Liberation Day comes to mind. We shifted to a tactically Overweight recommendation for US HY credit on April 8 amid peak volatility and spread widening north of our probability-weighted forecast. Our robust scenario analysis approach prior to the Liberation Day volatility helped guide us in determining when to tactically add risk add a time when others were reducing risk. In retrospect we wish we had recommended clients add credit risk across a wider variety of products.
Q: How do you cultivate a culture of innovation and adaptability within your team to stay ahead in the ever-evolving landscape of macro strategy?
A: Its important to approach the markets with an open-mind and try not to let yourself get stuck in the box of historical norms. When working with analysts and strategists across our team we keep an open mind and look to foster discussions that consider the what-if and not just analyze the historical precedents to guide our thinking. Using our young talent to incorporate a potentially different perspective and approach to markets is key in staying ahead of the curve in many facets of life, including the financial markets.
Q: How do you ensure that your macro strategy accounts for diverse global perspectives and potential regional disparities?
A: Talking to our wide variety of clients across the globe and maintaining relationships from prior roles over the years is key to ensure I get the best breadth of viewpoints to consider against my own. Thinking and analyzing in a vacuum is never going to produce the highest quality insights, in my view. Discussing views and learning others perspective in person is also particularly useful in uncovering new perspectives of your own you might not have without the catalyst of interaction with others.
Q: What is a counterintuitive insight you’ve gained from analyzing macroeconomic trends that others might overlook?
A: I think the macroeconomic and fundamental backdrop is certainly important for longer run trends and shifts in the market, but we must also focus on and analyze key technical factors to shape our tactical views. Understanding global positioning, funding market trends, potentially crowded trades across the market and how/when pain points may occur are not only key for tactical recommendations but for strategic positioning, too.
Q: If you could implement one new strategic initiative without any constraints, what would it be and why?
A: Research reports catered to specific investor types/portfolio mandates.
Top Picks
Summer Learning Program:
CreditSights’ Summer Learning Program, which began as a solution during the work-from-home covid period, has expanded into a flagship program that offers a wealth of information for those new to credit and those just looking for a refresher. The program, which is truly a labor of love for the Strategy team, is constantly evolving to stay in step with market trends and cover highly impactful market trends. Plus, we love to engage with he ‘future’ of the credit markets through our virtual office hours sessions.
The Know More. Risk Better. Podcast:
The CreditSights podcast is going strong and letting me live my dream of being a talk radio host with the bonus of showcasing the depth and breadth of our analyst team. From a podcast on podcasts to deep dives into the rates and energy markets with industry experts, my co-hosts and I indulge in our natural curiosity to talk about things that are underappreciated, misunderstood, or just interesting (an added bonus is that my mom listens to it).
Article: Friend or Foe: Public and Private Credit
The Strategy team leveraged data from across the firm to put together a comprehensive deep dive into the world of private credit. Together LFI’s pricing and market commentary, Covenant Review’s covenant quality scoring, CreditSight analyst intel and the Fitch Ratings’ private credit portfolios allow Strategy to shine a light on a highly opaque asset class.
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