BlueBay Asset Management has launched the BlueBay Total Return Credit Fund, which provides diversified global exposure to sub-investment grade credit through the credit cycle.
“We have developed the product to meet investor demand for a more flexible approach to credit markets that is not benchmark driven, and allows active shifts between areas of the market in a timely fashion,” says Mark Poole, chief investment officer.
The fund aims to achieve a total return of five to 10 per cent per annum over the credit cycle. Sources of return are broad based, with alpha achieved via security selection, asset allocation, asset class beta and, in periods of maximum uncertainty, macro/tail hedging. The Luxembourg-domiciled UCITS fund is benchmark unconstrained and allocates between high yield and loans, emerging market debt and convertibles. However, the fund is not a fund-of-funds and will hold underlying securities directly.
“We believe the fund fits neatly into existing portfolios enabling investors to access a product that can outperform government bonds, but without inherent equity risk. Our active fixed income management style at the sub-asset class level provides a strong competitive edge,” says Poole.
The fund will be managed by BlueBay’s asset allocation committee, which is comprised of a team of six of BlueBay’s most experienced credit experts with an average investment experience of 19 years and a strong track record in implementing dynamic decisions at different times of the economic cycle.
“For the first time we are bringing together many of BlueBay’s higher yielding specialties into a single pooled product. The natural downside protection afforded by higher yielding asset classes, combined with our unique view of risk and proven track record in asset allocation, means we can create a very attractive risk return proposition,” says Poole.