Hartford Funds has launched the Hartford Schroders Securitized Income Fund (HITIX)S, which is sub-advised by Schroder Investment Management North America Inc, and seeks to provide current income and long-term total return consistent with preservation of capital by investing in securitised credit instruments.
The Fund complements Hartford Funds’ collection of fixed income funds that invest across the yield curve in varying regions, sectors, and asset classes.
“Securitized credit has historically provided investors an avenue to higher potential returns while seeking to eliminate some downside risk,” says Vernon Meyer (pictured), Chief Investment Officer of Hartford Funds. “Leveraging Schroders’ institutional expertise in this space, we believe this solution is uniquely positioned to help retail investors achieve core portfolio construction needs: Emphasising fixed income diversification beyond corporate credit, and seeking income and attractive total returns while offering capital preservation.”
Using a research-oriented process featuring a top-down examination of the markets, economy, and risk compensation, the Fund will invest in US and foreign fixed and floating rate securitised credit instruments, including commercial mortgage-backed securities, asset backed securities, agency and non-agency residential mortgage-backed securities, collateralised loan obligations, collateralised mortgage obligations, and uniform mortgage-backed securities.
Michelle Russell-Dowe, Head of Securitised Credit at Schroders, will serve with Anthony Breaks as the Fund’s portfolio managers.
“We believe from a fundamental, technical, and valuation perspective, securitised products offer a unique opportunity today to provide income, and that our use of data and analytics enables us to effectively manage and monitor the downside of the asset class,” says Russell-Dowe. “We are also excited by the opportunities we believe are available to the Fund in the current cycle, where regulation of housing and consumers has resulted in balance sheet deleveraging for the consumer at a time when corporate securities appear to be uniquely leveraged.”