SunAmerica Asset Management has launched the SunAmerica Flexible Credit Fund, sub-advised by Newfleet Asset Management.
The fund invests in two specialised fixed income asset classes: floating rate loans and high-yield bonds.
These asset classes, often referred to as leveraged finance, offer the potential for attractive income and total return while also helping to protect against interest rate risk.
“We’re really excited to partner with David Albrycht from 20-time Lipper award winner Newfleet Asset Management,” says Mike Treske, executive vice president and chief distribution officer at SunAmerica. “Floating rate loans and high-yield bonds have been among the best-performing fixed income asset classes since 2008, and we believe they have the potential to perform well in today’s changing interest rate environment.”
Unlike most traditional fixed income investments, which generally fall in value when interest rates rise, floating rate loans and high-yield bonds have the potential to appreciate in rising rate environments, and in a well-diversified portfolio, they may act as a natural hedge against interest rate risk.
“The SunAmerica Flexible Credit Fund offers investors the potential to generate yield, regardless of whether rates go up or down,” says Albrycht, the fund’s lead portfolio manager and the president and chief investment officer of Newfleet. “The fund has no allocation constraints between high-yield bonds and floating rate loans, giving it the flexibility to seek income and return opportunities in either market.”
The fund’s active asset allocation strategy enables it to be responsive to interest rate trends, as well as other factors that may influence performance, including credit quality, market volatility and economic conditions. “This strategy fits perfectly with Newfleet's time-tested, multi-sector approach to fixed income investing, a style of investing we’ve adhered to for over 20 years,” adds Albrycht.
“There are many floating rate loan funds or high-yield bond funds,” says Treske. “But few funds combine Newfleet’s leveraged finance expertise with its ability to shift assets quickly and without constraint between these two asset classes.”
