Helen Mason
Schroders has launched an actively managed Australian credit strategy designed to meet the needs of investors seeking to diversify their equity or term deposit allocations whilst preserving capital, through exposure to the compelling, but historically difficult to access, Australian wholesale high yielding credit universe.
The Schroder Australian High Yielding Credit Fund seeks to deliver returns of 2.5 to 3.0 per cent above the cash rate, before fees, over the medium term, and offers daily liquidity unlike Term Deposits. The Fund has been running since 2001 as an allocation within Schroders Fixed Income and Multi-Asset strategies, and is now available to retail investors as a standalone fund for the first time.
Head of Fixed Income, Kellie Wood, said the strategy provides easy access to complicated wholesale credit markets and is managed by an experienced team with a robust and proven investment process.
“The fund is managed by Helen Mason, who has more than a decade’s experience as a fund manager and a senior credit research analyst at Schroders, and has been with the company since 2005. She is supported by a skilled local team with proven experience across fixed income and multi-asset investment, as well as by Schroders’ global network of credit analysts.”
Ms Mason said the strategy addresses the need for a higher-yielding income option beyond diversified, traditional equity and cash-based products, while seeking to avoid the liquidity challenges associated with private equity, structured and private debt markets.
The Fund can invest across the senior, subordinated, rated and unrated credit universe in Australia. This includes debt issued by Australian domiciled companies in any currency and offshore companies accessing the AUD capital markets (Kangaroo Issuers).
“Following years of rates at near zero, yields have been restored and fixed income assets are back in play. Inflation remains sticky while growth and employment are holding up, forcing central banks to maintain rates at elevated levels.”
“The Fund incorporates top-down and bottom-up views to identify the most compelling assets to own at any given point in the cycle and aims to provide attractive income opportunities, offering daily liquidity while effectively managing default risk.”
“It has the flexibility to invest across the Australian credit universe, unconstrained by benchmarks, to capture returns with appropriately managed risk.”
“The targeted result of this strategy is a diversified portfolio of investment-grade rated credit securities with the potential to deliver consistent returns above cash and term deposits but with lower volatility than equities,” Ms Mason said.
“This has been reflected in the strong 11.01% p.a. (gross of fees1) return, 6.70% above the cash rate, the Fund has delivered over a 1Y period, whilst also maintaining consistent outperformance over the long term, achieving relative return of 2.80% p.a. (gross of fees1) and 2.79% p.a. (gross of fees1) over the past 5 and 10 years respectively.”
The Fund has been awarded a Recommended rating from Zenith Investment Partners.
