The fund focuses on security selection rather than issuer selection alone, looking through a company’s capital structure to compare bonds, loans, credit derivatives and other securities with peers on a cross-asset basis. Monthly strategy meetings between the Manager, Head of Credit Research and Analysts determine where opportunities are in the universe, focusing on the largest names to give the richest opportunity set across credit asset classes. There is a bias towards the higher yielding parts of the universe, where the team believe there is the most opportunity for mispricing.
The portfolio consists of a structural allocation of two-thirds to the best ideas and one-third defensive trades which consists of sizeable positions intended to provide protection if credit markets go down, without detracting during up trending markets.
We like the fund due to its unique strategy which has shown a strong ability to participate in up bond markets, whilst participating minimally on the downside. The team behind the fund is very experienced and has a long history of working together.