Credit Select Risk-Managed
Credit Select Risk-Managed (CSRM) is a dynamic approach to multi-sector fixed income, built to enhance total return and manage duration over a full market cycle.
Objective: Increase total return over a full market cycle through opportunistic yield enhancement in constructive credit markets; dynamic duration management across markets; rapid de-risking in negative credit conditions; tail-risk hedge in extreme environments
Primary asset class: High yield debt
Tactical ranges:
- High yield: 0% to 100%
- Investment-grade fixed income & cash: 0% – 100%
- “Calibrate” duration
- Ultra-short to intermediate-term & floating-rate
Target allocation: 95% high yield, 5% investment-grade fixed income & cash
Portfolio construction ideas:
- Enhance total return in core fixed income portfolio: manage duration and opportunistically shore up yield without strategic commitment to higher-risk credit segments
- Use as satellite allocation to individual bond portfolio: liquid complement to laddered corporates, for example
- Complement strategic high yield allocations: provide tactical asset class “hedge” alongside buy-and-hold high yield exposure
- Consider as an allocation within a liquid alternatives portfolio: lower-volatility complement to long-short equity holdings
Options
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