Responding to UK investors’ dual requirements for yield enhancement and capital preservation, Investec Asset Management has launched the Investec Global Total Return Credit Fund (OEIC) for UK clients.
JLT Investment Solutions will be the seed investor in the Fund, which seeks the best investment opportunities across the global credit universe, creating a diversified portfolio which aims to be high-yielding yet comparatively defensive, with low volatility and low sensitivity to interest rates.
The Investec Global Total Return Credit Fund is a sterling-based UK domiciled replica of the SICAV which launched for global clients in June 2017. It will use a dynamic multi-asset credit investment process, comparable to the successful investment strategy run by its co-managers Jeff Boswell and Garland Hansmann, which has returned 8.0 per cent annualised since inception. The Fund will sit in the IA Strategic Bond Sector and will target a total return in excess of 3 month GBP LIBOR plus 4 per cent per annum over a full credit cycle (gross of fees), with an expected volatility of 5-7 per cent per annum.
The unconstrained portfolio will invest in 80-120 of the best ideas across the global credit spectrum, with the portfolio principally built from the bottom up. Benchmark agnostic, the Fund will adopt a dynamic and flexible approach to active asset allocation, enabling it to adapt to evolving market conditions. Implementing a rigorous risk management process it has the potential to deliver higher yields at similar risk to typical income funds, including strategic bond funds.
David Aird, Managing Director, UK Client Group at Investec Asset Management, says: “As traditional fixed income continues to fail to deliver meaningful returns, investors should protect against the double whammy of persistent low yields coupled with the potential impact of rising rates. Many UK clients are wising up to the fact that government bonds could generate severe losses in this environment, and are seeking an alternative to, for example, strategic bond funds.
“We are excited to work with JLT Investment Solutions to bring the Investec Global Total Return Credit Fund to our broad UK client base. In a rising rate environment, corporate credit has the ability to offer reduced interest rate sensitivity and attractive yields, in the hands of experienced and knowledgeable managers.”
The Investec Global Total Return Credit Fund will be co-managed by Jeff Boswell and Garland Hansmann, who have a thorough understanding of the complex multi-asset credit markets, with a combined 36 years’ experience. With a demonstrable long-term track record of jointly managing comparable investment strategies, Boswell and Hansmann, supported by the Firm’s globally integrated credit team, aim to provide investors with an attractive total return generated principally from credit spread and largely independent of interest rate movements.
Jeff Boswell, co-Portfolio Manager, says: “Investors are increasingly focused on sourcing attractive income streams. We believe this solution is well positioned to provide access to an unconstrained credit portfolio that aims to deliver on the requirement for enhanced yield.”
Garland Hansmann, co-Portfolio Manager, concludes: “In a world of rising interest rates, and with the accompanying increase in volatility, our diversification and nimble investment approach allows us to capitalise on a broad global credit opportunity set.”
