Investment Grade/Crossover

With around half of the investment grade market rated BBB, we apply high yield-style analysis to potentially attractive investment grade rated credits. This enables us to identify opportunities that may have been mispriced by the market, which we believe are solid credits that offer upside potential.

We have managed investment grade credit portfolios since 2003 and our strategies offer exposure to global markets. Most of these include a high yield component of varying magnitude depending on the risk profile, and we define these as crossover strategies. Combining investment grade and high yield may enhance returns whilst reducing volatility, thanks to the offsetting nature of these two sub-asset classes. This combination also allows us to take advantage of opportunities created by companies moving between the two rating categories, through rising stars and fallen angels.

Our Advantage

  • A Focus on Short Duration – allows investors to benefit from our credit analysis (and potential ensuing carry), whilst limiting interest rate exposure
  • Blending Investment Grade with High Yield – seeks to elevate return potential while reducing volatility
  • Deep Fundamental Credit Analysis – aims to identify creditworthy companies with attractive carry, applying a fundamental bottom-up approach

 

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.

 

“Having the flexibility to invest in both investment grade and high yield allows us to position the portfolio appropriately for different stages of the credit cycle. A global mandate meanwhile enables us to allocate by geography, currency and rating, with the aim of capturing opportunities wherever they appear”

Tatjana Greil-Castro, Co-Head of Public Markets, Portfolio Manager

Photo of Tatjana Greil-Castro, Co-Head of Public Markets, Portfolio Manager

Insights

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Jul 20, 2022

Time to Allocate to Credit?

Following a difficult first half for credit markets, we believe it may be worthwhile adding credit to portfolios, especially US high yield credit.

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Jul 15, 2021

Navigating the Transitions Created by Monetary, Fiscal and Responsible Investing Policies

As we move into the second half of the year, and as the global pandemic appears to be petering out.

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May 10, 2021

Key Themes for Investment Grade/Crossover - Q2 2021

Since the second half of 2020, there have been interesting opportunities in reopening sectors such as airlines, leisure and hotels.

Read More Insights