Absolute
Return Credit
Seeking positive returns irrespective of market conditions
Reasons to invest
Absolute return mandate
Flexible
Defensive
Experienced team
ESG integration
Overview
Investing worldwide, we aim to achieve strong absolute returns within global, liquid credit markets regardless of wider fixed-income conditions.
Why Absolute Return Credit?
Investors are searching for income in a world with many highly valued, and even negative-yielding, assets. Approaching credit in the right way is more important than ever. We take a market-neutral approach to exploit differences in relative value between credit instruments. Our goal is to generate predictable positive returns regardless of the market’s direction. Since inception, the strategy has paid a consistent monthly distribution (past performance is not a reliable indicator of future performance).
We are unconstrained by benchmarks and invest across geographies, currencies and instrument types, including bonds, loans and derivatives. We seek exposure to attractive sources of credit quality and income in the US, Europe and emerging markets. This provides us with more opportunities to exploit differences in valuation and potential return. It also provides better access to liquidity. We invest long in bonds, credit default swaps and loans with favourable valuations, and take short positions in securities with poorer prospects.
Absolute Return Credit is a defensive investment strategy focused on generating consistent returns with low volatility. We offer market-neutral exposure with low idiosyncratic risk, targeting low annualised volatility – broad diversification is key to achieving this. The portfolio consists of 150-200 issuers, both long and short.
How we invest
Investment Philosophy
We believe that global, relative-value investing throughout the capital structures of issuers can deliver strong returns through the market cycle.
Investment process
Team
Fraser Lundie, CFA
Head of Fixed Income – Public Markets, Federated Hermes Limited
Nachu Chockalingam, CFA
Senior Credit Portfolio Manager, Federated Hermes Limited
Vincent Benguigui
Senior Credit Portfolio Manager, Federated Hermes Limited
Product Information
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