abrdn has launched the Multi-Sector Credit Fund OEIC III (“the Fund”) designed for institutional clients, primarily Defined Benefit (DB) and Defined Contribution (DC) pension schemes.
The Fund can invest across a wide spectrum of fixed income asset classes, including Investment Grade (IG), high yield, leverage loans, Emerging Market (EM) corporates, Asian Credit, floating-rate asset backed security, subordinated financials and corporate hybrids.
The Fund addresses the demand from DB and DC pension schemes for liquid multi-sector credit solutions, diversifying away from traditional sterling assets. Targeting the ground between traditional sterling buy-and-maintain and higher risk multi-sector credit products, the Fund aims to target a spread pick-up of at least 100bps over sterling IG bonds. The Fund will seek to deliver higher risk-adjusted returns to sterling IG, but without the higher levels of risk often associated with multi-sector credit funds. This is measured within the Fund objective by seeking to generate income and some growth over the long term (5 years or more) by investing both directly and indirectly in bonds issued anywhere in the world
Mark Munro, investment director and fund manager for the Multi-Sector Credit Fund, said: “We’re really excited to launch the Multi-Sector Credit Fund, adding to our suite of unconstrained credit products. Whilst we believe the strategy will be attractive to many investors, we have designed the Fund specifically for DB and DC pension schemes. The Fund will give investors exposure to US, Europe and EM fixed income markets and should improve diversification and lower sector and stock risks for pension schemes.”
abrdn has 140+ fixed income investment professionals (with c. £136bn AUM) based across the globe, providing insights into local markets.
The Fund is a globally diversified fixed income solution with moderate volatility, an average investment grade rating and a short to medium term interest rate risk profile (2-5 years). The Fund aims to exceed the return of SONIA by 2.50% p.a. over rolling five-year periods (gross).’To build on the fund range available for the new abrdn pensions master trust, a feeder fund has been created on the abrdn Life & Pensions platform, abrdn Life Multi-Sector Credit Fund, alongside the recently launched abrdn Life Sustainable Equity Tracker Funds.
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