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Tailored for investment professionals this site provides information on our products, strategies and services. Please remember capital is at risk and past performance is not a guide to the future.

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Multi-Asset Credit

A dynamic strategy that offers yield, flexibility and improved diversity.

Strategy focus Multi-Asset Credit


Multi-Asset Credit – why now?

We believe a Multi-Asset Credit (MAC) strategy can offer higher yield while controlling risk by diversifying across different credit segments. While interest rates remain on an uncertain path, a MAC approach can also have low interest rate risk through the use of loans and high yield bonds with low duration. In addition, with volatility within financial markets becoming ever more common, we believe a flexible and reactive investment strategy will be far better placed to navigate through different market conditions.


A flexible, active credit strategy

At its core, our MAC strategy focuses on each of the significant developed credit markets: investment grade, high yield, and leveraged loans. Alongside this core focus, we can allocate to emerging market credit and structured credit, should we see sufficient value. Across these markets we seek to target the most efficient use of capital using security selection, beta management and asset allocation as sources of alpha. This dynamic portfolio evolves, adapting to market conditions, risk premia and liquidity.


Unconstrained bottom-up investing

Given our unconstrained approach to investing, the MAC portfolio consists of our best ideas across the credit spectrum, with complete benchmark independence in asset selection. We fundamentally believe that constructing portfolios bottom-up, in a risk-controlled manner, ultimately leads to a better investment result.



Portfolio benefits:

  • Bigger investable universe from which to choose, allowing for a wider opportunity set.
  • Credit asset class diversification leads to a better spread of risk and also less propensity for unproductive index biased investing.
  • Pricing inefficiency caused by individual asset class flows can create over or under valuations between asset classes.
  • Similar risk can often be mispriced between markets due to illiquidity premiums or structural complexity.
  • Credit asset class complexities are simplified through a single MAC solution where the manager deals with all implementation, structural and liquidity considerations.
  • This approach led to dynamic asset allocation across the credit markets, regionally and by asset class, which was a key driver of performance.
  • The performance through the year also illustrated the benefit of diversification across different sources of return, with robust performance through a variety of significant events.

Key benefits of the Investec Multi-Asset Credit Strategy:

  • A well-diversified portfolio, addressing investors’ need for risk-controlled income in today’s low-yield environment.
  • Targeting a return of cash +4-6% per year, through the credit cycle**.
  • Unfettered by region or benchmark.Region and benchmark agnostic
  • Managed by a single, globally integrated team operating as a coherent unit.
  • Experienced professionals with a thorough understanding of the multi-asset credit markets, with an average of over 14 years industry experience
  • Integrated with a well-regarded Multi-Asset and Emerging Market Fixed Income team.
  • Dynamic and disciplined screening identifies a wide range of opportunities enabling us to construct a ‘best ideas’ portfolio.
  • Careful security selection and rigorous management process built around our bespoke ‘Compelling Forces™' investment framework.


Past performance should not be taken as a guide to the future, losses may be made. *Multi-Asset Credit Strategy inception date: 01.01.16. **Performance target: 3M LIBOR +5% p.a. This represents a return target, not a guaranteed return.

Jeff Boswell

Co-Portfolio Manager,
Multi-Asset Credit

 

Garland Hansmann

Co-Portfolio Manager,
Multi-Asset Credit

Strategy Focus Spring 2017

How is our strategy differentiated to peers?

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Strategy Guide

An unconstrained investment approach with a disciplined process to building well-diversified portfolios.

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Thought Paper
Investing in Multi Asset Credit Strategies

In this paper we discuss the depth and breadth of the MAC opportunity set, as well as how such an unconstrained approach is implemented in practise – in a low-growth, low-return world.

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Technical Paper
Meeting the challenge of uncertain interest rates

This technical paper explains the tools that MAC managers have at their disposal to manage their portfolios through a challenging interest rate environment.

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Important information

All information is as at 30.06.17 unless otherwise stated.

Investment objectives and performance targets will not necessarily be achieved and there is no guarantee that these investments will make profits; losses may be made. Past performance is not a reliable indicator of future results.

Specific risks: Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income. Default: There is a risk that the issuers of fixed income investments (e.g. bonds) may not be able to meet interest payments nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and therefore investment loss. Derivative counterparty: A counterparty to a derivative transaction may fail to meet its obligations thereby leading to financial loss.
Derivatives: The use of derivatives may increase overall risk by magnifying the effect of both gains and losses. This may lead to large changes in value and potentially large financial loss. Interest rate: The value of fixed income investments (e.g. bonds) tends to decrease when interest rates and/or inflation rises.
Liquidity: There may be insufficient buyers or sellers of particular investments giving rise to delays in trading and being able to make settlements, and/or large fluctuations in value. which This may lead to larger financial losses than might be anticipated.