- A highly experienced investment team that has managed the Strategy since its inception
- A long and established track record focused on investment grade government and corporate bonds
- Aims to provide an attractive total return over the long-term through high monthly income generation and capital growth potential
- The Strategy is actively managed and benchmark unconstrained, which permits conviction in undervalued positions
- Flexibility to combine the Strategic and Tactical elements which can result in a return that is uncorrelated to traditional bond and equity markets
The Strategy is composed of two diversifying elements which form the basis of the strategy's long term investment objective:
The Strategic element: The core focus of the Strategy, using a value driven approach to identify undervalued corporate bonds.
- The team uses their own proprietary valuation model, the Credit Adjusted Valuation Scoring system (‘CAVS’), which allows efficient screening and monitoring of bond valuations
- The team seeks bonds with both attractive valuations and potential catalysts to drive the bond to fair value. Realization of idiosyncratic catalyst-driven opportunities can allow the Strategy to outperform, regardless of the direction of credit markets and the interest rate environment
- Once valuations and catalysts are identified, individual bonds are then subject to deep dive bottom-up credit research analysis, emphasizing solid balance sheets and sound corporate Strategy
The Tactical element: Used to complement the Strategic element, employing a dynamic allocation to government bonds and currencies to enhance total returns and potentially manage portfolio downside risks.
- A predominantly quantitative process that has been successfully implemented since the Strategy’s inception
- Incorporates analysis of short term return drivers with portfolio risk management techniques to actively manage duration and currency exposure
|Asset Class||Credit, Government Bond and Currency|
Performance by calendar years
Past performance is not indicative of future results. Returns may increase or decrease as a result of currency fluctuations.
Please note that the performance data is not intended to represent actual past or simulated past performance of an investment product. The data is calculated in GBP and is based on a representative investment product or products that follow the strategy. An example fee load of 0.25% has been applied from 1 March 2012 to 30 September 2019 and 0.20% from 30 September onwards.
We have not been able to find systematic alpha in ESG data for sovereigns so far. However, for a discretionary fund manager, ESG data analysis is a potential rich area for idiosyncratic alpha.
Investors embrace Beta; central bankers and unreliable boyfriends; and falling out of love with the energy sector.
There are five themes that will impact ESG in fixed income for the year(s) ahead: regulatory frameworks; economic realities; climate adaptation; biodiversity; and emerging markets.
Man offers a comprehensive suite of investment solutions and formats that can be tailored and optimised to meet specific client needs. Our investment solutions offer optionality including: liquidity, control, investment restrictions, investor customisations and transparency.
Access to investment products and mandate solutions are subject applicable laws and regulations including selling restrictions and licensing requirements. Investment solutions listed above may not be compatible for all investment strategies and may be subject to minimum subscription requirements. Regional Funds: In additions to UCITS and AIFs registered across the EEA, a number of investment strategies are available in vehicles registered in Chile, Netherlands, Hong Kong, Japan, Singapore, South Korea and Switzerland.
One should carefully consider the risks associated with investing, whether the strategy suits your investment requirements and whether you have sufficient resources to bear any losses which may result from an investment:
Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.
Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.
Counterparty Risk - The Strategy will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, ‘over-the- counter’("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.
Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.
Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility..
Financial Derivatives - The Strategy will invest financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) to achieve its investment objective. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The extensive use of FDI may significantly multiply the gains or losses.
Leverage - The Strategy's use of FDI may result in increased leverage which may lead to significant losses.
Emerging Markets - The Strategy may invest a significant proportion of its assets in securities with exposure to emerging markets which involve additional risks relating to matters such as the illiquidity of securities and the potentially volatile nature of markets not typically associated with investing in other more established economies or markets.
Hybrid Securities - The Strategy may invest in contingent convertible (“coco”) bonds. The performance of such bonds is dependent on a number of factors including interest rates, credit and equity performance, and the correlations between factors. As such these securities introduce significant additional risk to an investment in the Strategy.
Non-Investment Grade Securities - The Strategy may invest a significant proportion of its assets in non-investment grade securities (such as “high yield” securities) are considered higher risk investments that may cause income and principal losses for the Strategy. They are instruments which credit agencies have given a rating which indicates a higher risk of default. The market values for high yield bonds and other instruments tend to be volatile and they are less liquid than investment grade securities.
Total Return - Whilst the Strategy aims to provide capital growth, a positive return is not guaranteed over any time period and capital is in fact at risk.