Unconstrained Credit

A flexible and dynamic multi-sector credit solution throughout market cycles.

Reasons to invest

Unconstrained

With the ability to invest across the full spectrum of liquid credit globally, we aim to achieve a high level of income and capital growth.

Combining top-down/bottom-up

We seek to generate alpha by combining top-down asset allocation with bottom-up issuer and security selection.

Downside defence

We employ a dynamic hedge overlay to protect against down markets.

Experienced team

A skilled, integrated team with a strong record of implementing relative-value credit strategies since 2004.

ESG integration

Our investment process incorporates Federated Hermes’ leading ESG integration and engagement insights.

Strategy overview

Fraser Lundie
By combining unconstrained, high-conviction credit selection with a hedge against adverse market conditions, we aim to maximise long-term total returns
Fraser Lundie,
Head of Fixed Income - Public Markets

Why Unconstrained Credit?

Lower volatility credit can offer superior risk-adjusted returns against equities. Although high economic growth is desirable, credit can thrive in a low-growth environment given companies’ focus on balance-sheet health, leading to excellent fundamentals and low default rates.
Order with a leaf

Approaching credit in the right way is more important than ever. Through our global and unconstrained approach, we aim to achieve a high level of income and capital growth.

Order with a leaf

The process incorporates a dynamic option overlay to hedge against down markets and manage risk. This allows us to adjust the portfolio risk depending on prevailing market conditions while limiting turnover of our best ideas. The reduced volatility also contributes to the potential for strong risk-adjusted returns.

Icon

How we invest

Identifying sources of risk and opportunity
Disciplined bottom-up research
ESG integration and engagement

Investment philosophy

Active, high-conviction global relative value across capital structures

We believe:

  • Seamless integration of ESG and sustainability considerations, coupled with active engagement, is critical to sustainable long-term performance.
  • A high-conviction, active credit-selection process, guided by top-down analysis is essential to outperforming in both bull and bear markets.
  • Issuer selection universe beyond the US and Europe, including emerging markets, can create more opportunities and diversified sources of return.
  • Security selection is as important as company selection, searching capital structures for optimal instruments opens opportunities.
  • Downside defence improves risk-adjusted returns – we seek to preserve capital in down market environments.

Investment process

Investment process

Team

3090, 1639, 1559, 1601
Fraser Lundie
Fraser Lundie, CFA

Head of Fixed Income – Public Markets, Federated Hermes Limited

Nachu Chockalingam
Nachu Chockalingam, CFA

Senior Credit Portfolio Manager, Federated Hermes Limited

Vincent Benguigui
Vincent Benguigui

Senior Credit Portfolio Manager, Federated Hermes Limited

Badge big

Product Information

For the latest performance and vital information – including prices, key facts, identifiers and ratings

White tree

Insights

Read our latest portfolio perspectives