Finding opportunities in a world of vanishing interest rates

How a multi-asset credit approach could help superannuation funds seeking better yields and diversification.

  • In an unsupportive environment for government bonds, superannuation funds seeking a reliable income
    from fixed-income investments may be exploring multi-asset credit strategies (MACs).
  • MACs typically offer a core allocation to high-yield corporate bonds. In addition, by allocating to lower duration
    assets such as asset-backed securities, loans and other floating-rate instruments, MACs may be
    able to reduce their sensitivity to changes in interest rates.
  • It is important to be mindful of the risks when investing beyond traditional credit markets. A disciplined
    approach, which incorporates ESG analysis, can help to identify the investment opportunities, and avoid
    the ‘losers’ which run the risk of distress or default.

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Newton Investment Management is a global investment management firm, providing, in partnership with its parent company BNY Mellon Investment Management, a focused range of investment strategies to public and private-sector superannuation funds, corporations, and individuals. We run a broad range of multi-asset, fixed-income and equity strategies, and have particular expertise in absolute-return, income-focused, high-conviction and sustainable investing. We use a global thematic approach to help achieve long-term perspective. Our themes inform both the rigorous fundamental analysis carried out by our experienced global research analysts, and the construction of portfolios designed to meet our clients’ requirements. In addition to financial measures, we evaluate factors such as environmental impacts, social standards, and the effectiveness of people in charge. We believe this ‘purposeful ownership’ approach allows us to better manage risk and make more informed investment decisions, helping investors worldwide meet their desired investment outcomes.