Dolfin has launched the Dolfin Unconstrained Credit Strategy, which targets consistently positive returns in all market contexts by capturing top-down market shifts and investing in attractive bottom up opportunities across the global fixed income spectrum.
Devised and managed by credit expert, Alex Eventon, (pictured) the strategy applies a “go-anywhere” investment flexibility, institutional investment tools and dynamic risk management. It has a performance target of Libor plus 4 per cent.
Eventon says: “Most investors have to hold an allocation to fixed income securities, yet the outlook for generating returns in the current fixed income environment is challenging – especially when adhering to a rigid investment framework.
“We manage a defensive core portfolio with a flexible, active and disciplined approach, merging top-down themes with bottom-up high conviction ideas. This is enhanced with a mix of tactical and relative value opportunities. The strategy provides access to some less liquid opportunities and credit-linked structured products.
“Our carefully monitored investment freedom means that we only buy what we like, as opposed to being shackled by benchmark considerations or restrictions.”
“Unconstrained funds have struggled to perform in the past few years and the investment community has favoured lower-cost alternatives like ETFs. Momentum is building, however, around unconstrained credit strategies and there is increasing acceptance among investors that they will start to bear fruit as the expectation of higher interest rates and global inflation in 2017 could provide new opportunities for growth.”
Eventon adds: “One of the traps unconstrained funds have fallen into in the past has been their rigid adherence to the flexibility they have been afforded, irrespective of the market context. Our mission is simply to invest in the areas of the market where we feel the best risk reward opportunities are located, with the aim of participating in rising markets and preserving capital in complex periods.”
Demand for the strategy is currently led by institutional investors in the form of mandates. Dolfin is listening to the institutional, wholesale and intermediary investors to determine the appropriate timing for launching a fund vehicle and UCITS-compliant strategy.
