Why are Aegon and Barclays warning investors to prepare for market pain despite recent credit market gains?

Aegon Asset Management and Barclays warn of potential market pain because the April credit rally—driven by optimism that the Middle East war is over and strong US earnings—is fragile; crude oil prices hit a four-year high, Treasury yields surged on inflation fears, and the Strait of Hormuz remains effectively shut due to US-Israel strikes on Iran and Tehran’s threats, sustaining geopolitical and inflation risks that have not fully receded.

What specific defensive strategies are portfolio managers like Pelteshki and Villarroel adopting amid rising uncertainty?

Portfolio managers are adopting defensive strategies including buying credit default swaps (CDS), purchasing shorter-term debt to collect yield while limiting duration risk, and maintaining or boosting hedges using indices like the iTraxx Crossover and CDX North American Investment Grade—Pelteshki is focusing on shorter-dated bonds, while Villarroel continues to partly hold his March CDS hedge on the iTraxx Crossover index.

Aegon, Barclays Say Prepare for Market Pain

May 2, 2026

Aegon and Barclays warn of market downturns driven by surging crude oil prices and potential fertilizer supply disruptions in the Strait of Hormuz, urging defensive hedging strategies.

bloomberg

2026-04-29

Barclays sees faster oil supply growth from UAE after its exit from OPEC

2026-05-01

Barclays lifts 2026 Brent forecast to $100 on prolonged Hormuz disruption

2026-05-02

Aegon, Barclays Say Prepare for Market Pain

2026-05-12

UK Households Cut Spending at Fastest Rate in 18 Months, Barclays Says

2026-05-21

Barclays Keeps $100 Brent Oil Forecast for 2026 But Risks Skew Higher