Exactly right Tony, and it's the dimension the income case tends to underweight. At 278 basis points, spreads are pricing credit risk below historical average. Liquidity risk, which only shows up when you need to exit, is not in that number at all. Federated Hermes would agree with you: the compensation is insufficient before you even factor in what happens when redemption pressure builds.
Credit spreads rarely compensate investors for liquidity risk when they're well below historical averages. Yield alone isn't a margin of safety.
Exactly right Tony, and it's the dimension the income case tends to underweight. At 278 basis points, spreads are pricing credit risk below historical average. Liquidity risk, which only shows up when you need to exit, is not in that number at all. Federated Hermes would agree with you: the compensation is insufficient before you even factor in what happens when redemption pressure builds.