Multi Asset Credit – Creditable, Tactical, Dynamic

Our MAC strategies seek to tactically move in and out of sectors, geographies and sub-asset classes at different stages of the macroeconomic cycle. They aim to take advantage of opportunities and provide protection against downside risk. In a rapidly evolving investment environment, this may prove beneficial for investors unsure of where to allocate in credit.
MAC Monthly Update

Why Mac?

MAC strategies seek to offer several benefits for investors looking to diversify their credit exposure. They access a broad opportunity set across the US, Europe and emerging markets in investment grade, high yield and loans to increase the potential to generate risk-adjusted returns.

  • Enhance Risk/Return Profile
  • Protect from Drawdowns/Allocate to Opportunities
  • Reduce Volatility

 

Capital at risk. The value of investments and the income from them may fall as well as rise and is not guaranteed. Investors may not get back the full amount invested. Past performance is not an indication of current or future performance.

When to Access the Opportunity?

A MAC strategy offers investors a way to generate potentially attractive returns across the credit cycle. Even during challenging credit markets, it’s a way to stay prudently invested; it may provide moderate levels of return yet has the flexibility to position or reposition for a variety of potential risks.

They access a broad opportunity set across the US, Europe and emerging markets in investment grade, high yield and loans to increase the potential to generate risk-adjusted returns.

1 Europe
Since the crisis of 2007-2008 and the Euro Sovereign crisis of 2011-2012, this region has recovered well across the economic and political landscape, and now boasts a stronger regulatory and institutional framework with more developed financial markets.
2 Investment Grade Bonds
The fastest-growing segment of the bond market is for BBB rated companies. We believe it often offers better return potential given the greater chance for excess spread compression dependent on the economic cycle, as well as the potential for upgrades.
3 High Yield Bonds
These companies tend to have less sensitivity to interest rate rises, shorte5. r duration, and a low correlation to government bonds and investment grade companies.
4 Emerging Markets
Companies tend to have lower leverage and more cash than their developed markets peers. We consider emerging markets to be one of the best coupon asset classes.
5 Syndicated loans
Seek to provide investors with protection from rising rates and so tend to enjoy inflows in periods of rising rate expectations.
6 US
We expect the net result of US fiscal reforms to be favourable for credit markets based on a positive impact on earnings and reduced bond market supply.
When to Access the Opportunity?

MAC Strategies at Muzinich – Investment Process

We believe a thoughtful and disciplined investment process combines top down credit themes with a deep bench of global credit research to help promote a repeatable and consistent outcome.

MAC Strategies at Muzinich – Investment Process

Investment Team

Mike McEachern is the lead manager for our MAC strategies, which represent US$3.5bn our AUM.* Our investment philosophy and process has been consistent since the launch of our first MAC strategy in 2013.

Michael McEachern

Michael McEachern

Lead Portfolio Manager

39 Years of corporate credit experience
Portfolio Positioning / Risk Management

Brian Nold

Brian Nold

Portfolio Manager

23 Years of corporate credit experience
Portfolio Positioning / US High Yield

Warren Hyland

Warren Hyland

Portfolio Manager

27 Years of corporate credit experience
Portfolio Positioning / Emerging Markets

Supported by our Broader Markets Investment Team

7
Portfolio Managers (25y avg exp)
27
Research Analysts (17y avg exp)
7
Credit Traders (20y avg exp)
10
Risk Professionals (18y avg exp)

*as of March 31, 2023

How to Access Muzinich’s MAC Capabilities

Our MAC strategies seek to enhance returns while protecting against volatility, underpinned by a strong capital preservation mindset. They aim to increase or decrease risk exposure depending on the market environment.

Material Risk:  This material is not intended to be relied upon as a forecast, research, or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed by Muzinich & Co are as of May 2023 and may change without notice.

Global Tactical Credit

Seeks to provide the opportunity to ‘go anywhere’ in credit markets but with contained volatility.

  • Alpha generated by asset and sector allocation, credit selection and duration
  • Combines top down and bottom up analysis
  • Seeks to limit volatility to 5% over a market cycle

Dynamic Credit Income

Seeks to capture the outperformance in rising credit markets without taking excessive risks.

  • Focus on maintaining high level of portfolio yield
  • Combines macro analysis with bottom-up credit selection, first identifying rising and falling trends across the credit universe
  • Expected volatility 6-8% annualized

Insights

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Snapshot  |  February 12, 2024

Muzinich Asset Allocation Group Monthly Update - February 2024

Please click to view our latest Asset Allocation Group video update for the month of February 2024.

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Insight  |  February 22, 2023

Top Three Credit Themes for 2023

In what is shaping up to be a very different investment environment to 2022, three key themes are underpinning our multi-asset credit strategies.

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Insight  |  February 12, 2024

Muzinich Weekly Market Comment - 12th February 2024

Month-to-date (MTD), government yields were higher at the end of last week, as investors scaled back the timing of policy loosening by Western central banks. In contrast, Latin American central banks, the first to tighten, continue to remove restrictive measures.

If you would like to discuss any of our Multi Asset Credit strategies in further detail, please contact Hugo Wheeler, Managing Director, Country Manager - UK & Ireland

Hugo Wheeler

Hugo Wheeler

Managing Director, Country Manager - UK & Ireland

hwheeler@muzinich.com
Office: 0203 928 5346
Mobile: 07889 050954