I’ve heard the term “long credit” several times in reference to bonds. What type of securities makes up “long credit?”
Long and short can mean two different things in bondland. Long can mean bullish vs short in bearish. Or long can mean long duration vs short duration. So it depends on the context. Long credit in a strategy sense would mean that you think bonds with credit spreads embedded in them are nicely priced. So you’d want to acquire them. If you think credit spreads will narrow (i.e. more people will come to buy credit bonds, either because the risk of default is actually falling, or because you think the move will be an idea that catches favor with investors), then you want to accumulate them. If you think that credit spreads will narrow but that interest rates in general will rise, then you’d want to short out the interest rate part by buying credit bonds and selling treasury bonds with the same duration. The other meaning of long credits is that you’ll buy bonds with credit spreads that have a long duration, basically a long time to maturity and sometimes with lower coupons (because that makes the duration go up). You may or may not hedge out the interest rate risk with treasurys depending on your view, but in this environment, most people with a positive view on credit probably would want to separate out the interest rate risk from other things.