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