Schroders launches Global Credit Income fund in Hong Kong
Dynamic allocation across global bond markets helps deliver stable stream of income to investors in all market environments
Schroders announced today the launch of Schroder ISF1 Global Credit Income (the Fund) in Hong Kong. The Fund aims to achieve capital growth and deliver a consistent and attractive level of income by investing globally in investment grade, high yield, developed and emerging markets sovereign and municipal bonds, and asset-backed securities. The Fund intends to make a fixed monthly payout of 4.5% per annum2. It also places an emphasis on managing risks to investors’ capital.
Chris Durack, CEO of Hong Kong and Head of Institutional Business, Asia Pacific, said: “Achieving an acceptable and reliable source of income is important to many investors, particularly in an environment where interest rates remain low and market volatility may become more frequent and intense. At Schroders, we believe by investing across the global credit universe, we can build a portfolio to provide a relatively attractive level of income with a sensible balance of risk. We recognise that investors seeking income can be more sensitive to capital loss, and as such we are committed to capturing the best opportunities while managing the risks for them.”
Schroders takes an innovative theme-based investment approach that allows the Fund to identify idiosyncratic opportunities and risks from secular trends, such as macroeconomics, demographics, technology and consumer demand.
Patrick Vogel, Head of Credit Europe, said: “We assess how the world is changing around us and understand how the companies we invest in are adapting to these changes which in turn affect their creditworthiness. The global credit market is highly complex with various parts experiencing different levels of sensitivity to economic cycles. By dividing the global credit market into multiple bespoke sectors and analysing the corresponding return distribution, we are able to understand where drawdown risks might occur, and in turn manage potential loss and volatility relative to the global credit market effectively.”
Michael Scott, Credit Fund Manager, said: “Our unique investment approach has allowed us to capture opportunities from emerging markets and the rebound of commodities last year. In 2018, we think certain emerging markets are still in a relatively good phase of the credit cycle, such as the telecom and services sectors in Brazil, where real wages are growing, unemployment is falling, and the central bank may continue to cut rates, which will help propel the country’s economic and credit cycle. In developed markets, we believe credit fundamentals will remain strong, and we think default rates are likely to stay low across developed markets. However, as certain central banks look to cautiously remove accommodation, we do expect volatility to pick up. That is actually good news for active managers like Schroders, because it allows us to exploit these cheaper valuations.”
Chris Durack concludes: “Schroders is committed to delivering sustainable income solutions for investors in Hong Kong. The launch of our global credit income fund complements the suite of income-focused strategies that can help investors navigate through different market cycles to meet their income and growth objectives.”
1 Schroder International Selection Fund is referred to Schroder ISF
2 Fixed monthly payout of 4.5% p.a. (Applicable to A Dis USD and HKD classes. Dividend may be paid out of capital, pay attention to important information 2)
The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.