Fixed Income
Broad diversification in cash, investment grade credit, high yield, emerging and specialist markets across multiple currencies.
New Capital is part of EFG Asset Management. For more information visit: www.efg.com
Fixed Income
Relative Value Fixed Income
New Capital utilises the proprietary quantitative model ‘Relative Value’ which seeks out the best value opportunities – bonds that are cheap relative to their credit ratings.
Fixed income markets are fundamentally flawed as the result of institutionalised biases such as ratings based restrictions, capital charges, benchmark construction and supply and demand disequilibriums.
The Relative Value strategy aims to quantify the extent to which these forces have potentially mispriced bonds and focus critical credit research on bonds which offer a potentially greater payoff than their peers with similar risk characteristics.
Combining ideas it is possible to construct portfolios which provide target asset allocations more efficiently than benchmarks. Equally the process drives a truly active approach to fixed income investing, rotating not only between names, but also informing sector and country allocation decisions.
Utilising this approach we believe it is possible to construct portfolios which aim to achieve the highest possible return for an investor’s tolerance for systematic risk.
Strategy facts
| Wealthy Nations Bond | Global Value Credit | Euro Value Credit |
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A high conviction, value orientated investment grade strategy targeting investments in financially sound countries based on our Net Foreign Asset System. |
A high conviction, mid-duration portfolio utilises our relative value approach to uncover credit opportunities that can enhance returns from the global investment grade universe. |
A high conviction euro portfolio allocating to countries based on fundamental strength and value, not benchmarks weights. |
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Benchmark: ICE BofAML Eurodollar Index |
Benchmark: BoA ML 1-10 Yr Global Corporate Index |
Benchmark: BofA Merill Lynch European Large Cap Corporate Bond Index |
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Inception: September 2009 |
Inception: August 2003 |
Inception: September 2017 |
Convertibles
Our goal is to offer investors a favourable risk-return profile over the long term. It seeks to capitalise on the unique features of convertibles, offering the investor the potential for equity upside while providing the downside protection normally associated with bonds.
This asymmetric risk profile is a big attraction for investors. Moreover, the active and focused nature of this global fund ensures exposure to those areas of the market that offer the best opportunity of positive risk-adjusted returns.
The process is systematic, disciplined and repeatable. This is important, as it ensures a consistency in style and approach. The process focuses on credit quality first, followed by equity upside potential. Focusing on credit quality provides more certainty around downside protection and thereby ensures the return asymmetry that convertible issues offer.
The management is selective in terms of the issues that are purchased, recognising that the market is inefficient, which provides opportunities to buy good issues when they are out of favour.
Strategy facts
| Global Convertible Bond |
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A systematic and repeatable approach focused on convexity and credit quality |
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Benchmark: Thomson Reuters Convertible Global Focused Indices Hedged (USD) Index |
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Inception: December 2019 |