PORTFOLIO INSIGHT


Multi-asset credit (MAC): Navigating a low yield world


Lending money appears to be an easy concept. You lend an individual, company, bank or country money for which you receive regular interest payments until the principle is returned on an agreed date. Yet experienced credit investors know that it is much more complex than that. Risk is a major consideration when building a credit portfolio. Alongside the borrower defaulting, exposure to interest rate and currency movements need to be factored in while protect- ing investors from the volatility that is expected to become part of the landscape going forward. One way to manage this is to build a portfolio that houses different forms of credit, be it direct lending, investment- grade corporate, high yield, leveraged loans, or the more specialist sub-credit sectors. While there is no shortage of options for investors looking to build a credit portfolio, on the following pages Investec Asset Management’s MAC team explains how they assess price, risk and return when building a credit strategy.


Issue 88 | November 2019 | portfolio institutional | 21


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