Corporate credit specialist Muzinich & Co has launched the Muzinich & Co Global Tactical Credit Fund, which seeks to find the best credit investments across global public fixed income markets.
This is achieved through assessment of relative value across rating, duration and geographic spectrums, coupled with rigorous fundamental bottom-up analysis of investment grade and high yield corporate bonds and corporate loans.
The fund’s lead manager, Mike McEachern, may also use portfolio hedging techniques to help reduce short-term volatility during periods of rising interest rates or spread widening. The ability to hedge is designed to allow investment decisions to play out and deliver anticipated returns – leading to improved long-term risk-adjusted returns. The fund targets a return of Libor plus five to seven per cent and seeks to protect capital in weak or falling markets.
McEachern says: “The prospect of rising interest rates has prompted demand for nimble, multi-asset fixed income strategies as a complement to more traditional investments. We believe the Global Tactical Credit Fund can deliver meaningful long-term returns throughout a market cycle and crucially, we have the investment flexibility and hedging tools to provide a measure of portfolio protection as we navigate through a period of potentially rising interest rates.
“We can do this by moving in and out of global credit sectors, as well as up and down the credit quality and duration spectrum, as different fixed income assets move in and out of favour.”
As with all Muzinich & Co funds and strategies, rigorous fundamental credit analysis underpins the Global Tactical Credit Fund.
“We believe in-depth credit research is the long-term driver of attractive risk-adjusted returns,” says McEachern. “We perform our own bottom-up research and we do not rely on the views of other external providers.
“We also constantly assess the relative value of sectors, spreads, yields, returns and volatility and adjust portfolios as risk/reward profiles change.”
Global Tactical Credit is an Ireland-domiciled UCITS fund and has range of sterling, dollar and euro share classes available.