Strategy
Investment Approach
- Strategy focuses primarily on European currency-denominated corporate debt issued by below investment-grade companies.
- Invests mainly in BB and B rated bonds, with the ability to purchase lower-quality securities when compelling valuation and risk/reward opportunities arise.
- The strategy integrates fundamental proprietary research at the corporate bond, sovereign, and equity levels. This integral collaboration provides a holistic view of a company’s capital structure and management team, as well as its position in the larger market environment unique to each country.
- Research focuses on quantitative and qualitative factors that drive an independent credit rating. Analysts look to identify long-term potential for balance sheet and external rating improvements while adhering to strict risk management practices.
Portfolio Construction
- At least 80% of assets will be invested in securities denominated in European currencies—mainly the euro and the pound.
- Currency exposure is fully hedged back to the euro.
- Up to 20% of assets may be invested outside of European currencies, including U.S. dollar high yield and investment-grade corporate bonds.
- Target tracking error: 200–400 basis points
Past performance is not a reliable indicator of future performance.
Risks
- Credit risk
- Default risk
- Derivatives risk
- Emerging markets risk
- High yield bond risk
- Interest rate risk
- Liquidity risk
- Sector concentration risk
- Capital risk
- Counterparty risk
- ESG and Sustainability risk
- Geographic concentration risk
- Hedging risk
- Investment portfolio risk
- Management risk
- Operational risk